Calculations Shown

Question 16

Martinez Corporation engaged in the following cash transactions during 2014.

Sale of land and building  $191,000

Purchase of treasury stock  $40,000

Purchase of land  $37,000

Payment of cash dividend  $95,000

Purchase of equipment  $53,000

Issuance of common stock  $147,000

Retirement of bonds  $100,000

Determine Martinez's free cash flow, assuming that it reported net cash provided by operating activities of

$400,000.00  

*  Question 17  

A comparative balance sheet for Shabbona Corporation is presented below.  

12/31/2015  

Assets 2014 2013

Cash $73,000  $22,000

Accounts receivable 82,000 66,000

Inventory 180,000 189,000

Land 71,000 110,000

Equipment 260,000 200,000

Accumulated Depreciation-Equipment -69,000 -42,000

Total $597,000  $545,000

Liabilities and Stockholders' Equity  

Accounts payable $34,000  $47,000

Bonds payable 150,000 200,000

Common stock ($1 par) 214,000 164,000

Retained earnings 199,000 134,000

Total $597,000  $545,000

Additional information:  

1.   Net income for 2014 was $125,000.  

2.   Cash dividends of $60,000 were declared and paid.  

3.   Bonds payable amounting to $50,000 were retired through issuance of common stock .  

Prepare a statement of cash flows for 2014 for Shabbona Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)  

Question 18    

Chris Spear invested $15,000 today in a fund that earns 8% compounded annually. (Use the tables below .)    

To what amount will the investment grow in 3 years? To what amount would the investment  grow in 3 years if the fund earns 8% annual interest compounded semiannually? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 458,581.)    

Question 19       

Amy Monroe wants to create a fund today that will enable her to withdraw $25,000 per year for 8 years, with the first withdrawal to take place 5 years from today. (Use the tables  below.)

If the fund earns 8% interest, how much must Amy invest today? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 458,581.)

Question 20   

Zach Taylor is settling a $20,000 loan due today by making 6 equal annual payments of $4,727 .53. (Use the tables below .)   

What payments must Zach Taylor make to settle the loan at the same interest rate but with   

the 6 payments beginning on the day the loan is signed? (Round factor values to 5 decimal places, e.g. 1.25124 and final answers to O decimal places, e.g. 458,581.)   

Question 21      

Alan Jackson invests $20,000 at 8% annual interest, leaving the money invested without withdrawing any of the interest for 8 years. At the end of the 8 years, Alan withdraws the accumulated amount of  money.

 Compute the amount Alan would withdraw assuming the investment earns simple interest. (Round answers to O decimal places, e.g. 458,581.)      

Compute the amount Alan would withdraw assuming the investment earns interest compounded  annually.      

(Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places, e.g. 458,581.)      

Compute the amount Alan would withdraw assuming the investment earns interest compounded semiannually. (Round factor values to 5 decimal places, e.g. 1.25124 and final answer to O decimal places,  e.g. 458,581.)

Question 24

Morlan Corporation is preparing its December 31, 2014, financial statements . Two events that occurred between December 31, 2014, and March 10, 2015, when the statements were issued, are described below.

1.   A liability, estimated at $160,000 at December 31, 2014, was settled on February 26, 2015, at 170,000

2. A flood loss of $80,000 occurred on March 1, 2015.

What effect do these subsequent events have on 2014 net income

Question 27       

Heartland Company's budgeted sales and budgeted cost of goods sold for the coming year  are       

$144,000, 000 and $99,000,000, respectively. Short-term interest rates are expected to average 10% . If Heartland can increase inventory turnover from its present level of 9 times a year to a level of 12 times per year .

Compute its expected cost savings for the coming year.       

Question 30  

At December 31, 2014, Grinkov Corporation had the following account  balances.  

Installment Accounts Receivable, 2013  

Installment Accounts Receivable, 2014  

Deferred Gross Profit, 2013  

Deferred Gross Profit, 2014  

Most of Grinkov's sales are made on a 2-year installment basis.  

Indicate how these accounts would be reported in Grinkov's December 31, 2014, balance sheet. The 2013 accounts are collectible in 2015, and the 2014 accounts are collectible in 2016