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ACC 557 Week 9 HomeWork 5



ACC 557 Week 9 HomeWork 5 Due Week 9 and worth 50 points Directions: Answer the following questions on a separate Microsoft Word or Excel document. Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your assignment using the assignment link in Blackboard. Exercises E13-3. Cushenberry Corporation had the following transactions. Sold land (cost $12,000) for $15,000. Issued common stock at par for $20,000. Recorded depreciation on buildings for $17,000. Paid salaries of $9,000. Issued 1,000 shares of $1 par value common stock for equipment worth $8,000. Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200. Instructions For each transaction above, (a) prepare the journal entry, and (b) indicate how it would affect the statement of cash flows using the indirect method. E13-4. Gutierrez Company reported net income of $225,000 for 2015. Gutierrez also reported depreciation expense of $45,000 and a loss of $5,000 on the disposal of equipment. The comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a $17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses. Instructions Prepare the operating activities section of the statement of cash flows for 2015. Use the indirect method. Problems P13-3A. The income statement of Whitlock Company is presented here. Additional information: Accounts receivable increased $200,000 during the year, and inventory decreased $500,000. Prepaid expenses increased $150,000 during the year. Accounts payable to suppliers of merchandise decreased $340,000 during the year. Accrued expenses payable decreased $100,000 during the year. Operating expenses include depreciation expense of $70,000. Instructions Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2015, for Whitlock Company, using the indirect method. P13-7A. Presented below are the financial statements of Nosker Company. Additional data: Dividends declared and paid were $20,000. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale. All depreciation expense, $14,500, is in the operating expenses. All sales and purchases are on account. Instructions Prepare a statement of cash flows using the indirect method. Compute free cash flow.


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