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Problem 3

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	$1,801			$1,091
Receivables	1,757			1,301
Inventory	1,594			1,900
Plant assets	1,897			1,707
Accumulated depreciation	(1,205	)		(1,170	)
Long-term investments (held-to-maturity)	1,299			1,462
	$7,143			$6,291

Accounts payable	$1,207			$796
Accrued liabilities	203			245
Bonds payable	1,418			1,631
Common stock	1,893			1,706
Retained earnings	2,422			1,913
	$7,143			$6,291

FAIRCHILD COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
Sales		$6,851
Cost of goods sold		4,691
Gross margin		2,160
Selling and administrative expenses		930
Income from operations		1,230
Other revenues and gains
Gain on sale of investments		82
Income before tax		1,312
Income tax expense		531
Net income		$781

Additional information: During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $272. Prepare a statement of cash flows using the indirect method. (If an amount reduces the account balance then enter with negative sign.)

FAIRCHILD COMPANY Statement of Cash Flows For the Year Ended December 31, 2012 (Indirect Method)

		$
Adjustments to reconcile net income to

	$





















		$


		$

Problem 4

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	$1,803			$1,095
Receivables	1,755			1,291
Inventory	1,581			1,910
Plant assets	1,893			1,708
Accumulated depreciation	(1,194	)		(1,163	)
Long-term investments (held-to-maturity)	1,299			1,475
	$7,137			$6,316

Accounts payable	$1,205			$789
Accrued liabilities	213			235
Bonds payable	1,411			1,649
Common stock	1,898			1,692
Retained earnings	2,410			1,951
	$7,137			$6,316

FAIRCHILD COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2012
Sales		$6,828
Cost of goods sold		4,694
Gross margin		2,134
Selling and administrative expenses		935
Income from operations		1,199
Other revenues and gains
Gain on sale of investments		80
Income before tax		1,279
Income tax expense		547
Net income		$732

Additional information: During the year, $78 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $273. Prepare a statement of cash flows using the direct method. (If an amount reduces the account balance then enter with negative sign.)

FAIRCHILD COMPANY Statement of Cash Flows For the Year Ended December 31, 2012 (Direct Method)

		$
	$


















		$


		$

Cash at End of Period

Net Cash Provided by Financing Activities

Issuance of Common Stock for Plant Assets

Cash Collections from Customers

Cash Paid for Merchandise

Cash Paid for Selling/Administrative Expenses

Cash Paid for Income Taxes

Net Cash Provided by Operating Activities

Cash Flows from Investing Activities

Sale of Held-to-Maturity Investments

Purchase of Plant Assets

Net Cash Provided by Investing Activities

Cash Flows from Financing Activities

Issuance of Capital Stock

Retirement of Bonds Payable

Payment of Cash Dividends

Net Cash Provided by Financing Activities

Net Increase in Cash

Cash at Beginning of Period