Expert answer:Cash flows from operating activities, ACCT 221 Wee

Answer & Explanation:Week Three Homework Assignment (Chapters 16 and 17).xls
week_three_homework_assignment__chapters_16_and_17_.xls

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Name:
Date:
B-16.08
Section:
Gainesville Corporation’s income statement revealed sales of $700,000; gross profit of $300,000; selling and
administrative costs of $140,000; and income taxes of $45,000. The selling and administrative expenses
included $10,000 for depreciation. The company’s operating activities generated positive cash flow of
$129,000. Use the “indirect” approach to demonstrate how this amount was calculated. The following
additional information is available:
Beginning-of-Period Balance
End-of-Period
Balance
Account receivable
$70.000
$82.000
Inventory
50.000
41.000
Accounts payable
37.000
44.000
Cash flows from operating activities:
Net income
$
–
Add (deduct) noncash effects on operating income
$
–
Net cash provided by operating activities
$
129.000
Name:
B-16.14
Date:
Section:
Ozark Corporation reported net income of $100,000 for 20X5. The income statement revealed sales of
$1,000,000; gross profit of $520,000; selling and administrative costs of $340,000; interest expense of $20,000;
and income taxes of $60,000.
The selling and administrative expenses included $25,000 for depreciation. No equipment was sold during the
year. Equipment purchases were made with cash. Prepaid insurance included in the balance sheet related to
administrative costs. All accounts payable included in the balance sheet relate to inventory purchases. The
change in retained earnings is attributable to net income and dividends. The increase in common stock and
additional paid-in capital is due to issuing additional shares for cash.
Using the indirect approach, prepare a statement of cash flows for Ozark for the year ending December 31, 20X5.
Comparative balance sheets for Ozark follow.
OZARK CORPORATION
Balance Sheet
December 31, 20X4 and 20X5
Assets
Cash
20X5
$
458.700
20X4
$
471.450
Accounts receivable
199.250
171.500
Inventories
248.600
278.800
13.000
11.000
250.000
250.000
1.500.000
1.300.000
Prepaid insurance
Land
Building and equipment
(205.000)
Less: Accumulated depreciation
Total assets
(180.000)
$
2.464.550
$
2.302.750
$
85.700
$
93.400
Liabilities
Accounts payable
Interest payable
10.500
15.000
Income taxes payable
22.000
8.000
Common stock
710.000
700.000
Paid in capital in excess of par
990.000
900.000
Retained earnings
646.350
586.350
Stockholders’ equity
Total liabilities and equity
$
2.464.550
$
2.302.750
Name:
B-16.14
Date:
Section:
OZARK CORPORATION
Statement of Cash Flows (Indirect Approach)
For the Year Ending December 31, 20X5
Cash flows from operating activities:
Net income
$
–
Add (deduct) noncash effects on operating income
Depreciation expense
$
–
Increase in accounts receivable
–
Decrease in inventory
–
Increase in prepaid insurance
–
Decrease in accounts payable
–
Decrease in interest payble
–
Increase in income taxes payable
–
Net cash provided by operating activities
$
–
Cash flows from investing activities:
Purchase of equipment
$
–
Net cash used by investing activities
–
Cash flows from financing activities:
Proceeds from issuing stock
Dividends on common
$
–
Net cash provided by financing activities
Net decrease in cash
$
–
Cash balance at January 1, 20X5
Cash balance at December 31, 20X5
–
$
–
Name:
Date:
ealed sales of
se of $20,000;
sold during the
heet related to
urchases. The
mon stock and
mber 31, 20X5.
B-16.14
Section:
…
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