Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-02

WRIGHT COMPANYSpreadsheet for the Statement of Cash Flows

Dec. 31 Changes Dec. 312010 Debits Credits 2011

Balance SheetAssets: Cash 30 12 42 Accounts receivable 75 2 73 Short-term investment 15 25 40 Inventory 70 5 75 Land 60 10 50 Buildings and equipment 400 150 550 Less: Acc. depreciation (75) 40 (115)

575 715 Liabilities:Accounts payable 35 7 28 Salaries payable 5 3 2 Interest payable 3 2 5 Income tax payable 12 3 9 Notes payable 30 30 - Bonds payable 100 60 160

Shareholders' Equity:Common stock 200 50 250 Paid-in capital - excess of par 100 26 126 Retained earnings 90 35 80 135

575 715

Statement of IncomeRevenues: Sales revenue 380 380 Expenses: Cost of goods sold 130 (130) Salaries expense 45 (45) Depreciation expense 40 (40) Interest expense 12 (12) Loss on sale of land 3 (3) Income tax expense 70 (70)Net income 80 80

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-02

Statement of Cash FlowsOperating activities:Cash inflows: From customers 382 Cash outflows: To suppliers of goods 142 To employees 48 For interest expense 10 For income taxes 73 Net cash flows 109

Investing activities: Sale of land 7 Purchase of ST investment 25 Purchase of equipment 150 Net cash flows (168)

Financing activities: Repayment of notes payable 30 Sale of bonds payable 60 Sale of common stock 76 Payment of cash dividends 35 Net cash flows 71

Net increase in cash 12 12 Totals 1,175 1,175

Correct! Correct!

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-02

WRIGHT COMPANYStatement of Cash Flows

For year ended December 31, 2011 (in $000)

Cash flows from operating activities:Cash inflows: From customers $ 382 Cash outflows: To suppliers of goods (142) To employees (48) For interest (10) For income taxes (73)Net cash flows from operating activities $ 109

Correct!

Cash flows from investing activities: Sale of land 7 Purchase of short-term investment (25) Purchase of equipment (150)Net cash flows from investing activities (168)

Correct!

Cash flows from financing activities: Repayment of notes payable (30) Sale of bonds payable 60 Sale of common stock 76 Payment of cash dividends (35)Net cash flows from financing activities 71

Correct!

Net increase in cash 12 Cash balance, January 1 30 Cash balance, December 31 $ 42

Correct!

Given Data P21-02:

WRIGHT COMPANY

Balance Sheet and Income Statement data are given in the solution.

Additional information:Original land cost $ 10,000 Land sale $ 7,000 Common stock purchase $ 25,000 New equipment cost $ 150,000 Note payment, 1/1/2011 $ 30,000 Bond sale, 1/1/2011 $ 60,000 Common stock sold $ 76,000 Common stock par $ 50,000 Net income $ 80,000 Cash dividends paid $ 35,000

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-04

DUX COMPANYSpreadsheet for the Statement of Cash Flows ($ in 000s)

Dec. 31 Changes Dec. 312010 Debits Credits 2011

Balance SheetAsset:Cash 20 13 33 Accounts receivable 50 2 48 Less: Allowance (3) 1 (4)Dividends receivable 2 1 3 Inventory 50 5 55 Long-term investment 10 5 15 Land 40 30 70 Buildings and equipment 250 15 40 225 Less: Acc. depreciation (50) 30 5 (25)

369 420

Liabilities:Accounts payable 20 7 13 Salaries payable 5 3 2 Interest payable 2 2 4 Income tax payable 8 1 7 Notes payable - 30 30 Bonds payable 70 25 95 Less: Discount on bonds (3) 1 (2)

Shareholders' Equity:Common stock 200 10 210 Paid-in capital - excess of par 20 4 24 Retained earnings 47 14

13 25 45 Less: Treasury stock (at cost) - 8 (8)

369 420

Statement of IncomeRevenues: Sales revenue 200 200 Dividend revenue 3 3 Expenses: Cost of goods sold 120 (120) Salaries expense 25 (25) Depreciation expense 5 (5) Bad debts expense 1 (1) Interest expense 8 (8) Loss on sale of building 3 (3) Income tax expense 16 (16)Net income 25 25

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-04

Statement of Cash FlowsOperating activities:Cash inflows: From customers 202 From dividends received 2 Cash outflows: To suppliers of goods 132 To employees 28 For interest expense 5 For income taxes 17 Net cash flows 22

Investing activities: Sale of building 7 Purchase of LT investment 5 Purchase of equipment 15 Net cash flows (13)

Financing activities: Sale of bonds payable 25 Payment of cash dividends 13 Purchase of treasury stock 8 Net cash flows 4 Net increase in cash 13 13 Totals 584 584

Correct! Correct!

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-04

DUX COMPANYStatement of Cash Flows

For year ended December 31, 2011 (in $000)

Cash flows from operating activities:Cash inflows: From customers $ 202 From dividends received 2 Cash outflows: To suppliers of goods (132) To employees (28) For interest (5) For income taxes (17)Net cash flows from operating activities $ 22

Correct!

Cash flows from investing activities: Sale of building 7 Purchase of long-term investment (5) Purchase of equipment (15)Net cash flows from investing activities (13)

Correct!

Cash flows from financing activities: Sale of bonds payable 25 Payment of cash dividends (13) Purchase of treasury stock (8)Net cash flows from financing activities 4

Correct!

Net increase in cash 13

Cash balance, January 1 20 Cash balance, December 31 $ 33

Correct!

Noncash investing and financing activities:

Acquired $30,000 of land by issuing a 13%, 7-year note. $ 30 Correct!

Given Data P21-04:

DUX COMPANY

Balance Sheet and Income Statement data are given in the solution.

Additional information:Building cost $ 40,000 Building sale $ 7,000 Building depreciated 3/4Common stock purchased as long term investment $ 5,000 Note payable for property $ 30,000 Note payable interest 13%Equipment purchase $ 15,000 Bond sale, 1/1/11 $ 25,000 Stock dividend issue (1,000 shares) 5%Common stock par value $ 10 Market price per share $ 14 Cash dividends paid $ 13,000 Number of common stock shares repurchased 500 Common stock repurchase cost $ 8,000

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-05

METAGROBOLIZE INDUSTRIESSpreadsheet for the Statement of Cash Flows ($ in 000s)

Dec. 31 Changes Dec. 312010 Debits Credits 2011

Balance SheetAssets:Cash 375 225 600 Accounts receivable 450 150 600 Inventory 525 375 900 Land 600 150 75 675 Building 900 900 Less: Acc. depreciation (270) 30 (300)Equipment 2,250 900 300 2,850 Less: Acc. depreciation (480) 270 315 (525)Patent 1,500 300 1,200

5,850 6,900 Liabilities:Accounts payable 450 300 750 Accrued expenses 225 75 300 Lease liability - land - 150 150

Shareholders' Equity:Common stock 3,000 150 3,150 Paid-in capital - excess of par 675 75 750 Retained earnings 1,500 225 975

450 1,800 5,850 6,900

Income StatementRevenues: Sales revenue 2,645 2,645 Gain on sale of land 90 90 Expenses: Cost of goods sold 600 (600) Depreciation expense-build. 30 (30) Depreciation expense-equip. 315 (315) Loss on sale of equipment 15 (15) Amortization of patent 300 (300) Operating expenses 500 (500)Net income 975 975

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-05

Statement of Cash FlowsOperating activities:Cash inflows: From customers 2,495 Cash outflows: To suppliers of goods 675 For operating expenses 425 Net cash flows 1,395

Investing activities: Purchase of equipment 900 Sale of land 165 Sale of equipment 15 Net cash flows (720)

Financing activities: Payment of cash dividends 450 Net cash flows (450) Net increase in cash 225 225 Totals 8,155 8,155

Correct! Correct!

METAGROBOLIZE INDUSTRIESStatement of Cash Flows

For year ended December 31, 2011 (in $000)

Cash flows from operating activities:Cash inflows: From customers $ 2,495 Cash outflows: To suppliers of goods (675) For operating expenses (425)Net cash flows from operating activities $ 1,395

Correct!

Cash flows from investing activities: Purchase of equipment (900) Sale of land 165 Sale of equipment 15 Net cash flows from investing activities (720)

Correct!

Cash flows from financing activities: Payment of cash dividends (450)Net cash flows from financing activities (450)

Correct!

Net increase in cash 225

Cash balance, January 1 375 Cash balance, December 31 $ 600

Correct!

Noncash investing and financing activities:

Land acquired by capital lease $ 150 Correct!

Given Data P21-05:

METAGROBOLIZE INDUSTRIES

Balance Sheet and Income Statement data are given in the solution.

Additional information:Equipment cost $ 300,000 Depreciated 90%Stock dividend $ 225,000 Cash dividend $ 450,000

Student Name: InstructorClass: McGraw-Hill/Irwin

Problem 21-18

ARDUOUS COMPANYSpreadsheet for the Statement of Cash Flows ($ in 000s)

Dec. 31 Changes2010 Debits Credits

Balance SheetAsset:Cash 81 35 Accounts receivable 202 2 Less: Allowance (8) 2 Investment rev. receivable 4 2 Inventory 200 5 Prepaid insurance 8 4 Long-term investment 125 6

25 Land 150 46 Buildings and equipment 400 82 70 Less: Acc. depreciation (120) 35 12 Patent 32 2

1,074

Liabilities:Accounts payable 65 15 Salaries payable 11 5 Bond interest payable 4 4 Income tax payable 14 2 Deferred tax liability 8 3 Notes payable - 23 Lease liability - 82 Bonds payable 275 60 Less: Discount on bonds (25) 3

Shareholders' Equity:Common stock 410 20 Paid-in capital - excess of par 85 10 Preferred stock - 75 Retained earnings 227 30

22 67 Less: Treasury stock - 9

1,074

Statement of Cash FlowsOperating activities: Net income 67 Adjustments for noncash effects: Depreciation expense 12 Patent amortization expense 2 Amortization of discount 3 Decrease in accounts receivable 2 Increase in allowance 2 Increase in investment rev. receivable 2 Equity method income 6 Decrease in prepaid insurance 4 Increase in inventory 5 Decrease in accounts payable 15 Decrease in salaries payable 5 Increase in interest payable 4 Decrease in tax payable 2 Increase in deferred tax liability 3 Loss on flood (extraordinary) 18 Net cash flows

Investing activities: Sale of machine components 17 Purchase of LT investment 25 Purchase of land 23 Net cash flows

Financing activities: Retirement of bonds payable 60 Sale of preferred stock 75 Payment of cash dividends 22 Purchase of treasury stock 9 Net cash flows Net increase in cash 35 Totals 588 588

Correct! Correct!

ARDUOUS COMPANYStatement of Cash Flows

For year ended December 31, 2011 (in $000)

Cash flows from operating activities:Net income $ 67 Adjustments for noncash effects: Depreciation expense 12 Patent amortization expense 2 Amortization of discount 3 Loss on flood (extraordinary) 18 Changes in operating assets and liabilities: Decrease in accounts receivable 2 Increase in allowance 2 Increase in investment rev. receivable (2) Equity method income (6) Decrease in prepaid insurance 4 Increase in inventory (5) Decrease in accounts payable (15) Decrease in salaries payable (5) Increase in interest payable 4 Decrease in tax payable (2) Increase in deferred tax liability 3 Net cash flows from operating activities

Cash flows from investing activities: Sale of machine components 17 Purchase of LT investment (25) Purchase of land (23)Net cash flows from investing activities

Cash flows from financing activities: Retirement of bonds payable (60) Sale of preferred stock 75 Payment of cash dividends (22) Purchase of treasury stock (9)Net cash flows from financing activities

Net increase in cash

Cash balance, January 1Cash balance, December 31

Noncash investing and financing activities:Acquired $82 million building by 15-year capital lease.Acquired $46 million of land by issuing cash and a 15%, 4-year note as follows: Cost of land $ 46 Cash paid 23 Note issued $ 23

Correct!

ARDUOUS COMPANYSpreadsheet for the Statement of Cash Flows ($ in 000s)

Dec. 312011

116 200 (10) 6 205 4

156 196 412 (97) 30 1,218

50 6 8 12 11 23 82 215 (22)

430 95 75

242 (9) 1,218

82

(31)

(16) 35

ARDUOUS COMPANYStatement of Cash Flows

For year ended December 31, 2011 (in $000)

$ 82 Correct!

(31) Correct!

(16) Correct!

35

81 $ 116

Correct!

Given Data P21-18:

ARDUOUS COMPANY

Balance Sheet and Income Statement data are given in the solution.

Additional information:Customer accounts written off as uncollectible $ 6,000,000 Share of the net income of Demur Company shown as revenue $ 6,000,000 Gain on sale of treasury bills $ 2,000,000 Machine cost $ 70,000,000 Unharmed machine components sold $ 17,000,000 Machine depreciated 1/2Increase in deferred income tax liability $ 3,000,000 Preferred stock of Tory Corporation purchased as long-term investment $ 25,000,000 Land cost $ 46,000,000 Cash paid in land purchase $ 23,000,000 Note issued in land purchase $ 23,000,000 Note interest rate 15%Note maturity in years 4 Term of capital lease for building purchase in years 15 Present value of building lease payments $ 82,000,000 Bonds retired at maturity $ 60,000,000 Stock dividend issue (4,000,000 shares) 4%Par value of common stock $ 5.00 Market price of common stock at time of stock dividend $ 7.50 Common stock repurchased as treasury stock $ 9,000,000 Number of shares repurchased $ 1,000,000