For Lady Hawkins Ph.D Only Accounting Homework

week_1_exercise_1.1.xlsx

Problem 1


The income statement of Minerals Plus, Inc., follows:
MINERAL PLUS, INC. Income Statement Year Ended September 30, 2012
Revenues:
Service revenue		$235,000
Expenses:
Cost of goods sold	$97,000
Salary expense	57,000
Depreciation expense	26,000
Income tax expense	4,000	184,000
Net income		$51,000
Additional data follows:
a. Acquisition of plant assets is $118,000. Of this amount, $100,000 is paid in cash and $18,000 by signing a note payable.
b. Cash receipt from sale of land totals $28,000. There was no gain or loss.
c. Cash receipt from issuance of common stock total $29,000.
d. Payment of note payable is $18,000.
e. Payment of dividends is $8,000.
f. From the balance sheet:
	September 30,
	2012	2011
Current Assets:
Cash	$30,000	$8,000
Accounts receivable	41,000	59,000
Inventory	97,000	93,000
Current Liabilities:
Accounts payable	$30,000	$17,000
Accrued liabilities	11,000	24,000
Requirement:
1. Prepare Mineral Plus's statement of cash flows for the year ended September 30, 2012, using the indirect method. Include a separate section for noncash investing and financing activities.

The comparative balance sheet of Jakson Educational Supply at December 31, 2012, reported the following:
	December 31,
	2012	2011
Current Assets:
Cash and cash equivalents	$88,200	$22,500
Accounts receivable	14,400	21,700
Inventories	63,600	60,400
Current Liabilities:
Accounts payable	$28,600	$27,100
Accrued liabilities	10,600	11,200
Jackson's transactions during 2012 included the following:
Payment of cash dividend	$17,200	Depreciation expense	$16,700
Purchase of equipment	54,400	Purchase of building	100,000
Issuance of long-term note payable to borrow cash	50,000	Net income	59,600
		Issuance of common stock for cash	106,000
Requirements:
1. Prepare the statement of cash flows of Jackson Educational Supply for the year ended December 31, 2012. Use the indirect method to report cash flows from operating activities.
2. Evaluate Jackson's cash flows for the year. Mention all three categories of cash flows and give reason for your evaluation.
3. If Jackson plans similar activity for 2013, what is its expected cash flow?

The income statement and additional data of Best Corporation follows:
BEST CORPORATION Income Statement Year Ended June 30, 2012
Revenues:
Sales revenue	$231,000
Dividend revenue	8,000	$239,000
Expenses:
Cost of goods sold	$102,000
Salary expense	48,000
Depreciation expense	28,000
Advertising expense	13,000
Income tax expense	11,000
Interest expense	3,000	205,000
Net income		$34,000
Additional data follows:
a. Collections from customers are $15,500 more than sales.
b. Dividend revenue, interest expense, and income tax expense equal their cash amounts.
c. Payments to suppliers are the sum of cost of goods sold plus advertising expense.
d. Payments to employees are $1,000 more than salary expense.
e. Acquisition of plant assets is $102,000.
f. Cash receipts from sale of land total $24,000.
g. Cash receipts from issuance of common stock total $32,000.
h. Payment of long-term note payable is $17,000.
i. Payment of dividends is $10,500.
j. Cash balance, June 30, 2011, was $25,000; June 30, 2012 was $28,000.
Requirement:
1. Prepare Best Corporation's statement of cash flows for the year ended June 30, 2012. Use the direct method.
2. Also differentiate between Indirect and Direct method of preparing statements of cash flows.