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Take
home quiz for Ch 21
–
-ACG4111 Spring 2013
1. Following are the income statement and some additional information.
Madden COMPANY
INCOME STATEMENT
FOR YEAR ENDED 12/31/
2011
Net sales
1
50,000.00
$
COGS
(10
5,000.00
)
$
Gross Margin
45,000.00
$
Salary expenses
20,000.00
$
depreciation expense
9,000.00
$
Interest expense
5,000.00
$
(34,000.00)
$
Income before taxes
1
1,000.00
$
Income tax expense
(4,000.00)
$
Net income
7,000.00
$
selective balance sheet accounts
chg
2011
2010
Accounts receivable
200.00
$
1,100.00
$
(900.00)
$
Accounts payable
800.00
$
1,100.00
$
(300.00)
$
inventory
13,000.00
$
13,
500.00
$
(500.00)
$
salary payable
1,200.00
$
1,000.00
$
200.00
$
income tax payable
2,000.00
$
1,500.00
$
500.00
$
deferred tax liability
400.00
$
–
$
400.00
$
Bonds payable
50,000.00
$
50,000.00
$
less: discount on bond payable
(800.00)
$
(1,000.00)
$
200.00
$
Required:
Prepare the cash flows from operating activities section of the statement of cash flows using the direct method .
2. The balance sheets for Spiceland Company showed the following information. Additional information concerning transactions and events during 2008 are presented below.
Spiceland Company
Balance Sheet
December 31
2008
2007
Cash
$ 30,900
$ 10,200
Accounts receivable (net)
41,000
20,300
Inventory
37,300
42,000
Long-term investments
0
15,000
Property, plant & equipment
236,500
150,000
Accumulated depreciation
(37,700)
(25,000)
$308,000
$212,500
Accounts payable
$ 20,000
$ 26,500
Accrued liabilities
18,000
17,000
Long-term notes payable
70,000
50,000
Common stock
130,000
90,000
Retained earnings
70,000
29,000
$308,000
$212,500
Additional data:
1.
Net income for the year 2008, $76,000.
2.
Depreciation on plant assets for the year, $12,700.
3.
Sold the long-term investments for $28,000.
4.
Paid dividends of $35,000.
5.
Purchased machinery costing $26,500, paid cash.
6.
Purchased machinery and gave a $60,000 long-term note payable.
7.
Paid a $40,000 long-term note payable by issuing common stock.
Required: Prepare a statement of cash flows for 2008 in good form. Note: use indirect method for cash flows from operating activities).
