Direct and Indirect cash flows on excel
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take_home_quiz_for_ch21.docTake home quiz for Ch 21--ACG4111 Spring 2013
1. Following are the income statement and some additional information.
Madden COMPANY
INCOME STATEMENT
FOR YEAR ENDED 12/31/2011
Net sales
150,000.00
$
COGS
(105,000.00)
$
Gross Margin
45,000.00
$
Salary expenses
20,000.00
$
depreciation expense
9,000.00
$
Interest expense
5,000.00
$
(34,000.00)
$
Income before taxes
11,000.00
$
Income tax expense
(4,000.00)
$
Net income
7,000.00
$
selective balance sheet accounts
chg
2011
2010
Accounts receivable
200.00
$
1,100.00
$
(900.00)
$
Accounts payable
800.00
$
1,100.00
$
(300.00)
$
inventory
13,000.00
$
13,500.00
$
(500.00)
$
salary payable
1,200.00
$
1,000.00
$
200.00
$
income tax payable
2,000.00
$
1,500.00
$
500.00
$
deferred tax liability
400.00
$
-
$
400.00
$
Bonds payable
50,000.00
$
50,000.00
$
less: discount on bond payable
(800.00)
$
(1,000.00)
$
200.00
$
Required: Prepare the cash flows from operating activities section of the statement of cash flows using the direct method .
2. The balance sheets for Spiceland Company showed the following information. Additional information concerning transactions and events during 2008 are presented below.
Spiceland Company
Balance Sheet
December 31
2008 2007
Cash $ 30,900 $ 10,200
Accounts receivable (net) 41,000 20,300
Inventory 37,300 42,000
Long-term investments 0 15,000
Property, plant & equipment 236,500 150,000
Accumulated depreciation (37,700) (25,000)
$308,000 $212,500
Accounts payable $ 20,000 $ 26,500
Accrued liabilities 18,000 17,000
Long-term notes payable 70,000 50,000
Common stock 130,000 90,000
Retained earnings 70,000 29,000
$308,000 $212,500
Additional data:
1. Net income for the year 2008, $76,000.
2. Depreciation on plant assets for the year, $12,700.
3. Sold the long-term investments for $28,000.
4. Paid dividends of $35,000.
5. Purchased machinery costing $26,500, paid cash.
6. Purchased machinery and gave a $60,000 long-term note payable.
7. Paid a $40,000 long-term note payable by issuing common stock.
Required: Prepare a statement of cash flows for 2008 in good form. Note: use indirect method for cash flows from operating activities).
