ACC – Wiley Plus Exercise – 23-4 23-7 23-11 23-12

| August 14, 2017

The income statement of Rodriquez Company is shown below.
RODRIQUEZ COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2012
Sales $6,884,420
Cost of goods sold Beginning inventory $1,897,410
Purchases 4,478,260
Goods available for sale 6,375,670
Ending inventory 1,601,260
Cost of goods sold 4,774,410
Gross profit 2,110,010
Operating expenses Selling expenses 448,740
Administrative expenses 695,660
1,144,400
Net income $965,610
Additional information:
1. Accounts receivable decreased $317,330 during the year. 2. Prepaid expenses increased $160,690 during the year. 3. Accounts payable to suppliers of merchandise decreased $281,450 during the year. 4. Accrued expenses payable decreased $127,540 during the year. 5. Administrative expenses include depreciation expense of $56,710.
Prepare the operating activities section of the statement of cash flows using the direct method.
Situation A:Chenowith Co. reports revenues of $191,900 and operating expenses of $111,340 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $82,360 and $37,200, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.
Using the direct method, compute net cash provided (used) by operating activities. (If an amount reduces the account balance then enter with negative sign.)
Net cash providedusedby operating activities $

Situation B:The income statement for Edgebrook Company shows cost of goods sold $310,820 and operating expenses (exclusive of depreciation) $227,710. The comparative balance sheet for the year shows that inventory increased $23,390, prepaid expenses decreased $8,240, accounts payable (related to merchandise) decreased $18,620, and accrued expenses payable increased $11,740.
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.
(a) Cash payments to suppliers $
(b) Cash payments for operating expenses $
Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.

FAIRCHILD COMPANYCOMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2012 AND 2011
2012
2011
Cash $1,807
$1,095
Receivables 1,750
1,294
Inventory 1,593
1,902
Plant assets 1,897
1,703
Accumulated depreciation (1,203
)
(1,169
)
Long-term investments (held-to-maturity) 1,301
1,465
$7,145
$6,290
Accounts payable $1,216
$791
Accrued liabilities 200
230
Bonds payable 1,406
1,649
Common stock 1,900
1,692
Retained earnings 2,423
1,928
$7,145
$6,290

FAIRCHILD COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2012
Sales $6,812
Cost of goods sold 4,692
Gross margin 2,120
Selling and administrative expenses 920
Income from operations 1,200
Other revenues and gains Gain on sale of investments 90
Income before tax 1,290
Income tax expense 531
Net income $759
Additional information:
During the year, $64 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $264.
Prepare a statement of cash flows using the indirect method. (If an amount reduces the account balance then enter with negative sign.)
Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.

FAIRCHILD COMPANYCOMPARATIVE BALANCE SHEETAS OF DECEMBER 31, 2012 AND 2011
2012
2011
Cash $1,805
$1,096
Receivables 1,742
1,299
Inventory 1,585
1,905
Plant assets 1,894
1,700
Accumulated depreciation (1,206
)
(1,178
)
Long-term investments (held-to-maturity) 1,294
1,469
$7,114
$6,291
Accounts payable $1,209
$793
Accrued liabilities 210
236
Bonds payable 1,401
1,648
Common stock 1,891
1,703
Retained earnings 2,403
1,911
$7,114
$6,291

FAIRCHILD COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2012
Sales $6,854
Cost of goods sold 4,702
Gross margin 2,152
Selling and administrative expenses 939
Income from operations 1,213
Other revenues and gains Gain on sale of investments 83
Income before tax 1,296
Income tax expense 534
Net income $762
Additional information:
During the year, $73 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $270.
Prepare a statement of cash flows using the direct method. (If an amount reduces the account balance then enter with negative sign.)

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