Cornerstones of Financial Accounting
4th Edition
ISBN: 9781337690881
Author: Jay Rich, Jeff Jones
Publisher: Cengage Learning
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Chapter 11, Problem 41E
Determining Cash Flows from Investing Activities
Burns Company’s 2019 and 2018 balance sheets presented the following data for equipment:
During 2019, equipment costing $41,000 with
Required:
1. Calculate the amount of depreciation expense for 2019.
2. Calculate the amount of cash spent for equipment during 2019.
3. Calculate the amount that should be included as a
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Analyzing Cash Flow Effects of Equipment Sale
Frontier Company sold equipment on June 30, 2020, for $30,000. The equipment had been depreciated $1,500 for the first six months of 2020, contributing to an
accumulated depreciation balance of $10,000 on June 30, 2020. The original cost of the equipment was $50,000.
Assuming the indirect method in presenting cash flows from operating activities, indicate any adjustments to net income in the operating activities section and any additions
or subtractions in the investing and financing activities sections.
• Note: Indicate a subtraction in the cash flow statement with a negative sign in the Amount column.
• Note: If an item is not included in the cash flow statement, enter a zero in the Amount column and "N/A" in the Cash Flow Section column.
Item
Amount
Cash Flow Section
Depreciation of equipment
Loss on sale of equipment
Gain on sale of equipment
Proceeds from sale of equipment $
Determining Cash Flows from Investing Activities
Burns Company’s 2019 and 2018 balance sheets presented the following data for equipment:
Jan. 1 Dec. 31Equipment $262,000 $325,000 Accumulated depreciation 108,000 133,900 Book value $154,000 $191,100 During the year, equipment costing $41,000 with accumulated depreciation of $36,700 was sold for cash, producing a $3,200 gain.
Required:
1. Calculate the amount of depreciation expense.$fill in the blank 12. Calculate the amount of cash spent for equipment.$fill in the blank 23. Calculate the amount that should be included as a cash inflow from the disposal of equipment.
Statement of Cash Flows
The following is a list of the items to be included in the preparation of Warrick Company's 2019 statement of cash flows:
Net income, $35,400
Payment for purchase of building, $87,000
Increase in accounts receivable, $7,200
Proceeds from issuance of common stock, $36,400
Increase in accounts payable, $4,400
Proceeds from sale of land, $8,000
Depreciation expense, $19,000
Payment of dividends, $32,000
Gain on sale of land, $3,500
Decrease in inventory, $3,300
Payment for purchase of long-term investments, $8,300
Amortization of discount on bonds payable, $1,500
Proceeds from issuance of note, $16,000
Increase in deferred taxes payable, $5,800
Equipment acquired by capital lease, $19,500
Decrease in salaries payable, $2,600
Beginning cash balance, $22,000
Required
1. Prepare the statement of cash flows. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.
WARRICK COMPANY
Statement of Cash Flows
For Year Ended December…
Chapter 11 Solutions
Cornerstones of Financial Accounting
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - How is a statement of cash flows different from an...Ch. 11 - Prob. 4DQCh. 11 - What are the three categories into which inflows...Ch. 11 - Prob. 6DQCh. 11 - Why are direct exchanges of long-term debt for...Ch. 11 - Describe the relationship between changes in cash...Ch. 11 - What are two ways to report a companys net cash...Ch. 11 - Why are depreciation, depletion, and amortization...
Ch. 11 - Prob. 11DQCh. 11 - Prob. 12DQCh. 11 - What does an increase in inventory imply? How...Ch. 11 - Prob. 14DQCh. 11 - Prob. 15DQCh. 11 - Prob. 16DQCh. 11 - Prob. 17DQCh. 11 - What balance sheet account changes might you...Ch. 11 - Prob. 19DQCh. 11 - Prob. 20DQCh. 11 - Prob. 21DQCh. 11 - Prob. 22DQCh. 11 - Prob. 23DQCh. 11 - Prob. 24DQCh. 11 - Which of the following is not a use of the...Ch. 11 - Which of the following would be classified as a...Ch. 11 - Prob. 3MCQCh. 11 - Which of the following is an example of a cash...Ch. 11 - Prob. 5MCQCh. 11 - Which of the following statements is true? a. Net...Ch. 11 - Mullinix Inc. reported the following information:...Ch. 11 - Which item is added to net income when computing...Ch. 11 - Refer to the information for Cornett Company...Ch. 11 - Prob. 10MCQCh. 11 - Chasse Building Supply Inc. reported net cash...Ch. 11 - Smoltz Company reported the following information...Ch. 11 - Prob. 13MCQCh. 11 - Classification of Cash Flows Stanfield Inc....Ch. 11 - Classification of Cash Flows Patel Company...Ch. 11 - Prob. 16CECh. 11 - Analyzing Changes in Balance Sheet Accounts Refer...Ch. 11 - Prob. 18CECh. 11 - Prob. 19CECh. 11 - Determining Net Cash Flow from Investing...Ch. 11 - Prob. 21CECh. 11 - Prob. 22CECh. 11 - Cash Receipts from Customers Singleton Inc. had...Ch. 11 - Prob. 24CECh. 11 - Prob. 25CECh. 11 - Prob. 26BECh. 11 - Prob. 27BECh. 11 - Analyzing Balance Sheet Accounts A review of the...Ch. 11 - Prob. 29BECh. 11 - Prob. 30BECh. 11 - Prob. 31BECh. 11 - Prob. 32BECh. 11 - Prob. 33BECh. 11 - Classification of Cash Flows A review of the...Ch. 11 - Classification of Cash Flows The following are...Ch. 11 - Analyzing Changes in Balance Sheet Accounts A...Ch. 11 - Analyzing the Accounts Casey Company uses a...Ch. 11 - Analyzing the Accounts The controller for Summit...Ch. 11 - Reporting Net Cash Flow from Operating Activities...Ch. 11 - Prob. 40ECh. 11 - Determining Cash Flows from Investing Activities...Ch. 11 - Determining Cash Flows 1from Investing Activities...Ch. 11 - Determining Cash Flows from Financing Activities...Ch. 11 - Prob. 44ECh. 11 - Partial Statement of Cash Flows Service Company...Ch. 11 - Prob. 46ECh. 11 - Prob. 47ECh. 11 - Preparing Net Cash Flows from Operating...Ch. 11 - Preparing a Statement of Cash Flows-Direct Method...Ch. 11 - Preparing a Statement of Cash Flows-Direct Method...Ch. 11 - Prob. 51ECh. 11 - Prob. 52PSACh. 11 - Prob. 53PSACh. 11 - Classification of Cash Flows Rolling Meadows...Ch. 11 - Prob. 55PSACh. 11 - Preparing a Statement of Cash Flows Monon Cable...Ch. 11 - Prob. 57PSACh. 11 - Preparing Net Cash Flows from Operating...Ch. 11 - Using a Spreadsheet to Prepare a Statement of Cash...Ch. 11 - Prob. 52PSBCh. 11 - Prob. 53PSBCh. 11 - Prob. 54PSBCh. 11 - Preparing a Statement of Cash Flows Volusia...Ch. 11 - Prob. 56PSBCh. 11 - Prob. 57PSBCh. 11 - Prob. 58PSBCh. 11 - Using a Spreadsheet to Prepare a Statement of Cash...Ch. 11 - Prob. 60.1CCh. 11 - Prob. 60.2CCh. 11 - Prob. 60.3CCh. 11 - Prob. 61.1CCh. 11 - Profitability Declines and the Statement of Cash...Ch. 11 - Prob. 61.3CCh. 11 - Prob. 61.4CCh. 11 - Prob. 62.1CCh. 11 - Prob. 62.2CCh. 11 - Prob. 62.3CCh. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Income, Cash Flow, and Future Losses On January L...Ch. 11 - Prob. 63.4CCh. 11 - Researching Accounting Standards: Dissenting Views...Ch. 11 - Prob. 64.2CCh. 11 - Prob. 65.1CCh. 11 - Prob. 65.2CCh. 11 - Prob. 65.3CCh. 11 - Prob. 65.4CCh. 11 - Prob. 65.5CCh. 11 - Prob. 65.6CCh. 11 - Prob. 65.7CCh. 11 - Prob. 65.8CCh. 11 - Prob. 66.1CCh. 11 - Prob. 66.2CCh. 11 - Prob. 66.3CCh. 11 - Prob. 66.4CCh. 11 - Comparative Analysis: Under Armour, Inc., versus...Ch. 11 - Prob. 67.1CCh. 11 - CONTINUING PROBLEM: FRONT ROW ENTERTAINMENT The...
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