# Question Details

### ACC 557 – Homework 5: Chapter 13 Complete Solution

Question Details:
ACC 557 – Homework 5: Chapter 13 Complete Solution

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.

1.     Sold land (cost \$12,000) for \$15,000.

2.     Issued common stock at par for \$20,000.

3.     Recorded depreciation on buildings for \$17,000.

4.     Paid salaries of \$9,000.

5.     Issued 1,000 shares of \$1 par value common stock for equipment worth \$8,000.

6.     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.

1.     Accounts receivable increased \$200,000 during the year, and inventory decreased \$500,000.

2.     Prepaid expenses increased \$150,000 during the year.

3.     Accounts payable to suppliers of merchandise decreased \$340,000 during the year.

4.     Accrued expenses payable decreased \$100,000 during the year.

5.     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.

1.     Dividends declared and paid were \$20,000.

2.     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.

3.     All depreciation expense, \$14,500, is in the operating expenses.

4.     All sales and purchases are on account.

Instructions

a)     Prepare a statement of cash ﬂows using the indirect method.

b)    Compute free cash ﬂow.

Attachments

Solution Details:
ACC 557 – Homework 5: Chapter 13 Complete Solution

Cash Flow from Operating Activities: Net Income \$32,000 Add Depreciation Expenses 14,500 Increase in Accounts Receivable (16,00...