**For Lady Hawkins Ph.D Only** Accounting Homework
Aiavker621week_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. |
Problem 2
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? |
Problem 3
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. |