Strayer Univ ACC 557 Assignment Exercises

Strayer Univ ACC 557 Assignment Exercises in $15 only

Directions: Answer the following questions on a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard.

Exercises

E13-3. Cushenberry Corporation C had the following transactions.

  • Sold land (cost $12,000) for $15,000.
  • Issued common stock at par for $20,000.
  • Recorded depreciation on buildings for $17,000.
  • Paid salaries of $9,000.
  • Issued 1,000 shares of $1 par value common stock for equipment worth $8,000.
  • Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200.

Instructions

For each transaction above, (a) prepare the journal entry, and (b) indicate how it would affect the statement of cash ?ows using the indirect method.

E13-4. Gutierrez Company reported net income of $225,000 for 2015. Gutierrez also reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.

Instructions

Prepare the operating activities section of the statement of cash ?ows for 2015. Use the indirect method.

Problems

P13-3A. The income statement of Whitlock Company is presented here.

Whitlock Company

Income Statement

For the Year Ended November 30th, 2015

Sales Revenue $7,700,000

Cost of Goods Sold

Beginning Inventory $1,900,000

Purchases 4,400,000

Goods available for sale 6,300,000

Ending Inventory 1,400,000

Total Cost of Goods sold 4,900,000

Gross profit 2,800,000

Operating expenses 1,150,000

Net Income $1,650,000

Additional information:

  • Accounts receivable increased $200,000 during the year, and inventory decreased $500,000.
  • Prepaid expenses increased $150,000 during the year.
  • Accounts payable to suppliers of merchandise decreased $340,000 during the year.
  • Accrued expenses payable decreased $100,000 during the year.
  • Operating expenses include depreciation expense of $70,000.

Instructions

Prepare the operating activities section of the statement of cash ?ows for the year ended November 30, 2015, for Whitlock Company, using the indirect method.

P13-7A. Presented below are the ?nancial statements of Nosker Company.

NOSKER COMPANY

Comparative Balance Sheets

December 31

Assets 2015 2014

Cash $ 38,000 $ 20,000

Accounts Receivable 30,000 14,000

Inventory 27,000 33,000

Equipment 60,000 78,000

Accumulated depreciation- Equipment (29,000) (24,000)

Total $126,000 $108,000

Liabilities and Stockholders’ Equity

Accounts Payable $ 24,000 $ 15,000

Income Taxes Payable 7,000 8,000

Bonds Payable 27,000 33,000

Common Stock 18,000 14,000

Retained Earnings 50,000 38,000

Total $126,000 $108,000

NOSKER COMPANY

Income Statement

For the Year Ended December 31, 2015

Sales Revenue $242,000

Cost of Goods Sold 175,000

Gross profit 67,000

Operating expenses 24,000

Income from operations 43,000

Interest expense 3,000

Income Before income taxes 40,000

Income tax expense 8,000

Net Income $ 32,000

Additional data:

  • Dividends declared and paid were $20,000.
  • During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.
  • All depreciation expense, $14,500, is in the operating expenses.
  • All sales and purchases are on account.

Instructions

  • Prepare a statement of cash ?ows using the indirect method.
  • Compute free cash ?ow.

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