11A_problem_set_3_2013.doc

# 11A_problem_set_3_2013.doc - Management 11A Summer 2013...

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Management 11A Summer 2013 Rich Armstrong Problem Set #3 Due Date: Tuesday, July 23 in class. Total Points: 130 Chapter 12 1) E 12-2 (14 points) Classify transactions by type of activity . (SO 2 ), C An analysis of comparative balance sheets, the current year's income statement, and the general ledger accounts of Gygi Corp. uncovered the following items. Assume all items involve cash unless there is information to the contrary. a. Payment of interest on notes payable. (operating activity) b. Exchange of land for patent. (investing activity) c. Sale of building at book value. (operating activity) d. Payment of dividends. (financing activity) e. Depreciation. (operating activity) f. Conversion of bonds into common stock. (financing activity) g. Receipt of interest on notes receivable. (operating activity) h. Issuance of capital stock. (investing activity) i. Amortization of patent. (operating activity) j. Issuance of bonds for land. (financing activity) k. Purchase of land. (investing activity) l. Receipt of dividends on investment in stock. (financing activity) m. Loss on sale of land. (operating activity) n. Retirement of bonds. (financing activity) Instructions Indicate how each item should be classified in the statement of cash flows using these four major classifications: operating activity (indirect method), investing activity, financing activity, and significant noncash investing and financing activity.

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2) E 12-5 (10 points) Prepare the operating activities section—indirect method . (SO 4 ), AP The current sections of Putzier Inc.'s balance sheets at December 31, 2011 and 2012, are presented here. Putzier's net income for 2012 was \$153,000. Depreciation expense was \$27,000. 2012 2011 Current assets Cash \$105,000 \$ 99,000 Accounts receivable 80,000 89,000 Inventory 168,000 172,000 Prepaid expenses 27,000 22,000 Total current assets \$380,000 \$382,000 Current liabilities Accrued expenses payable \$ 15,000 \$ 5,000 Accounts payable 85,000 92,000 Total current liabilities \$100,000 \$ 97,000 Instructions Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2012, using the indirect method. PUTZIER INC. Partial Statement of Cash Flows For the Year Ended December 31, 2012 Cash flows from operating activities Net income ................................................................................. \$153,000 Depreciation expense ............................................ \$27,000 ) Increase in accrued expenses payable ................... 10,000 ) Decrease in accounts receivable ............................... 9,000 Decrease in inventory ............................................. 4,000 Increase in prepaid expenses ................................ (5,000) Decrease in accounts payable ............................... (7,000 )     38,000 Net cash provided by operating activities ............................................ \$191,000
3) E 12-7 (15 points) Prepare partial statement of cash flows—indirect method . (SO 4 ), AN The three accounts shown below appear in the general ledger of Jurena Corp. during 2012. Equipment Date Debit Credit Balance Jan. 1 Balance 160,000 July 31 Purchase of equipment 70,00 0 230,000 Sept. 2 Cost of equipment constructed 53,00 0 283,000 Nov. 10 Cost of equipment sold 49,000 234,000 Accumulated Depreciation–Equipment Date Debit Credit Balance Jan.

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