Rodriquez Company

The income statement of Rodriquez Company is shown below.



RODRIQUEZ COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2012



Sales

$6,884,420



Cost of goods sold

Beginning inventory

$1,897,410



Purchases

4,478,260



Goods available for sale

6,375,670



Ending inventory

1,601,260



Cost of goods sold

4,774,410



Gross profit

2,110,010



Operating expenses

Selling expenses

448,740



Administrative expenses

695,660



1,144,400



Net income

$965,610





Additional information:





1. Accounts receivable decreased $317,330 during the year.

2. Prepaid expenses increased $160,690 during the year.

3. Accounts payable to suppliers of merchandise decreased $281,450 during the year.

4. Accrued expenses payable decreased $127,540 during the year.

5. Administrative expenses include depreciation expense of $56,710.



Prepare the operating activities section of the statement of cash flows using the direct method.





Situation A:

Chenowith Co. reports revenues of $191,900 and operating expenses of $111,340 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $82,360 and $37,200, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.



Using the direct method, compute net cash provided (used) by operating activities. (If an amount reduces the account balance then enter with negative sign.)





Net cash

providedused

by operating activities

$







Situation B:

The income statement for Edgebrook Company shows cost of goods sold $310,820 and operating expenses (exclusive of depreciation) $227,710. The comparative balance sheet for the year shows that inventory increased $23,390, prepaid expenses decreased $8,240, accounts payable (related to merchandise) decreased $18,620, and accrued expenses payable increased $11,740.



Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.





(a) Cash payments to suppliers

$





(b) Cash payments for operating expenses

$



Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.







FAIRCHILD COMPANY

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2012 AND 2011





2012



2011



Cash

$1,807



$1,095



Receivables

1,750



1,294



Inventory

1,593



1,902



Plant assets

1,897



1,703



Accumulated depreciation

(1,203



)



(1,169



)



Long-term investments (held-to-maturity)

1,301



1,465





$7,145



$6,290





Accounts payable

$1,216



$791



Accrued liabilities

200



230



Bonds payable

1,406



1,649



Common stock

1,900



1,692



Retained earnings

2,423



1,928





$7,145



$6,290









FAIRCHILD COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2012



Sales

$6,812



Cost of goods sold

4,692



Gross margin

2,120



Selling and administrative expenses

920



Income from operations

1,200



Other revenues and gains

Gain on sale of investments

90



Income before tax

1,290



Income tax expense

531



Net income

$759





Additional information:



During the year, $64 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $264.



Prepare a statement of cash flows using the indirect method. (If an amount reduces the account balance then enter with negative sign.)



Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.







FAIRCHILD COMPANY

COMPARATIVE BALANCE SHEET

AS OF DECEMBER 31, 2012 AND 2011





2012



2011



Cash

$1,805



$1,096



Receivables

1,742



1,299



Inventory

1,585



1,905



Plant assets

1,894



1,700



Accumulated depreciation

(1,206



)



(1,178



)



Long-term investments (held-to-maturity)

1,294



1,469





$7,114



$6,291





Accounts payable

$1,209



$793



Accrued liabilities

210



236



Bonds payable

1,401



1,648



Common stock

1,891



1,703



Retained earnings

2,403



1,911





$7,114



$6,291









FAIRCHILD COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2012



Sales

$6,854



Cost of goods sold

4,702



Gross margin

2,152



Selling and administrative expenses

939



Income from operations

1,213



Other revenues and gains

Gain on sale of investments

83



Income before tax

1,296



Income tax expense

534



Net income

$762





Additional information:



During the year, $73 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $270.



Prepare a statement of cash flows using the direct method. (If an amount reduces the account balance then enter with negative sign.)