Reference no: EM13858572

Problem 1. For the just completed year, Hanna Company had net income of $82,000. Balances in the company's current asset and current liability accounts at the beginning and end of the year were as follows:

Current assets:	December 31
	Beginning of End of Year           Year
Cash	$ 58,000	$ 77.000
Accounts receivable	$ 166,000	$ 182,000
Inventory	$ 439,000	$ 358,000
Prepaid expenses	$         11,000	$   14,000
Current liabilities:
Accounts payable	$ 364,000	$ 398,000
Accrued liabilities	$          7,500	$   12.000
Income taxes payable	$         36,000	$ 26.000

The Accumulated Depreciation account had total credits of $48,000 during the year. Hanna Company did not record any gains or losses during the year.

Required:

Using the indirect method, determine the net cash provided by operating activities for the year. (List any deduction in cash and cash outflows as negative amounts.)

Problem 2. The following changes took place last year in parvoik campany's sheet accounts:

Asset and Contra•Asset Accounts			Liabilities and Equity Accounts
Cash	$       11	D	Accounts payable                    $    35
Accounts receivable	$        15	I	Accrued liabilities                    $   15	0
Inventory	$        40	D	Income taxes payable              $   20
Prepaid expenses	$        10	I	Bonds payable                                    $ 132
Long-term investments	$        12	0	Common stock                                      $ 60	0
Property, plant, and equipment	$ 260		Retained earnings                                $   55
Accumulated depreciation	$          55	I

Long-term investments that had cost the company $12 were sold during the year for $28, and land that had cost $27 was sold for $15. In addition, the company declared and paid $9 in cash dividends during the year. Besides the sale of land, no other sales or retirements of plant and equipment took place during the year. Pavolik did not retire any bonds during the year or issue any new common stock.

The company's income statement for the year follows:

Sales		$ 750
Cost of goods sold		320
Gross margin		430
Selling and administrative expenses		330
Net operating income		100
Nonoperating items:
Loss on sale of land	$ (12)
Gain on sale of investment	16	4
Income before taxes		104
Income taxes		40
Net Income		$ 64

The company's beginning cash balance was $110 and its ending balance was $99.

Required:

1. Using the indirect method, determine the net cash provided by / used in operating activities for the year. (List any deduction in cash and cash outflows as negative amounts.)

2. Prepare a statement of cash flows for the year. (List any deduction in cash and cash outflows as negative amounts.)

Problem 3.

Comparative financial statement data for Carmono Company follow

Assets	This Year	Last Year
Cash	$           9.50	$ 18.00
Accounts receivable	58.00	51.00
Inventory	102.50	89.60
Total current assets	170.00	158.60
Property, plant, and equipment	243.00	202.00
Less accumulated depreciation	48.80	36.60
Net property, plant, and equipment	194.20	165.40
Total assets	$ 364.20	$324.00
Liabilities and Stockholders' Equity
Accounts payable	$         61.50	$ 50.00
Common stock	134.00	103.00
Retained earnings	168.70	171.00
Total liabilities and stockholders' equity	$ 364.20	$324.00

For this year. the company reported net income as follows:

Sales	$1,050.00
Cost of goods sold	630.00
Gross margin	420.00
Selling and administrative expenses	400.00
Net income	$ 20.00

This year Carmono declared and paid a cash dividend. There were no sales of property, plant. and equipment during this year. The company did not repurchase any of its own stock this year.

Required:

1. Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts. Round your Intermediate calculations and final answers to 2 decimal places.)

2. Compute Can-nono's free cash flow for this year.

Problem 4.

Yoric Company listed the net changes in its balance sheet accounts for the past year as follows:

Cash Accounts receivable	Debits >                     Credits > Credits by: Debits by: $ 121,200 170,500
Inventory		$ 63,300
Prepaid expenses	4,600
Long-term loans to subsidiaries		87,000
Long-term investments	94,000
Plant and equipment	280.000
Accumulated depreciation		65,800
Accounts payable		50.000
Accrued liabilities	5,500
Income taxes payable		9,200
Bonds payable		201,000
Common stock		123,000
Retained earnings		76.500
	$ 675,800	$ 675.800

The following additional information is available about last year's activities:

a. Net income for the year was $ ?

b. The company sold equipment during the year for $35,000. The equipment originally cost $160,300 and it had $126,400 In accumulated depreciation at the time of sale.

c. Cash dividends of $10,800 were declared and paid during the year.

d. The beginning and ending balances In the Plant and Equipment and Accumulated Depreciation accounts are given below:

                                                Beginning          Ending

Plant and equipment              $ 2,915,000                $ 3,195.000

Accumulated depreciation       $ 976,600            $ 1,042.400

e. The balance in the Cash account at the beginning of the year was $109,900; the balance at the end of the year was?

f. If data are not given explaining the change in an account, make the most reasonable assumption as to the cause of the change.

Required:

Using the indirect method, prepare a statement of cash flows for the year. (List any deduction in cash and cash outflows as negative amounts.)