S14.docx - S14-1 a The statement of cash flows helps...

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S14-1 a. The statement of cash flows helps predict future cash flows by reporting past cash receipts and payments, which are good predictors of future cash flows. b. The statement of cash flows helps evaluate management decisions by reporting on managers’ investments. Good decisions will benefit the company’s performance. c. The statement of cash flows helps predict the ability to make debt payments to lenders and pay dividends to stockholders by reporting where cash came from and how it was spent. S14-2 a. Operating f. Investing b. Financing g. Financing c. Investing h. Operating d. Operating i. Financing e. Non-cash j. Operating S14-3 a. O+ f. O+ b. F− g. O+ c. O− h. O− d. F+ i. O+ e. O− j. I− S14-4 GDM EQUIPMENT, INC. Statement of Cash Flows—Partial Year Ended December 31, 2016 Cash Flows from Operating Activities: Net Income $ 44,000 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense $ 9,000 Increase in Accounts Receivable (9,000) Decrease in Accounts Payable (4,000) (4,000) Net Cash Provided by Operating Activities $ 40,000
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S14-5 SMART CELLULAR Statement of Cash Flows—Partial Year Ended April 30, 2016 Cash Flows from Operating Activities: Net Income $ 62,000 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense $ 4,000 Increase in current assets other than cash (26,000) Decrease in current liabilities (18,000) (40,000) Net Cash Provided by Operating Activities $ 22,000 S14-6 SMART CELLULAR Statement of Cash Flows Year Ended April 30, 2016 Cash Flows from Operating Activities: Net Income $ 62,000 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense $ 4,000 Increase in Current Assets other than Cash (26,000) Decrease in Current Liabilities (18,000) (40,000) Net Cash Provided by Operating Activities 22,000 Cash Flows from Investing Activities: Cash Purchase of Equipment (36,000) Cash Receipt from Sale of Land 26,000 Net Cash Used for Investing Activities (10,000) Cash Flows from Financing Activities: Cash Receipt from Issuance of Common Stock 25,000 Cash Payment of Dividends (5,600) Net Cash Provided by Financing Activities 19,400 Net Increase (Decrease) in Cash 31,400 Cash Balance, April 30, 2015 23,300 Cash Balance, April 30, 2016 $ 54,700
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S14-7 Requirement 1 Plant Assets 12/31/2015 80,350 Acquisition s 27,900 0 Disposals 12/31/2016 108,250 Requirement 2 Notes Payable 11,000 12/31/2015 Payment 5,600 4,600 Issuance 10,000 12/31/2016 S14-8 STENBACK MEDIA CORPORATION Statement of Cash Flows Year Ended December 31, 2016 Cash Flows from Operating Activities: Net Income $ 1,600 Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Depreciation Expense—Plant Assets $ 26,900 Increase in Accounts Receivable (1,000) Increase in Accounts Payable 2,500 28,400 Net Cash Provided by Operating Activities 30,000 Cash Flows from Investing Activities: Cash Purchase of Plant Assets (27,900) Net Cash Used for Investing Activities (27,900) Cash Flows from Financing Activities: Cash Receipt from Issuance of Common Stock 5,000 Cash Receipt from Issuance of Notes Payable 4,600 Cash Payment of Dividends (5,300) Cash Payment of Notes Payable (5,600) Net Cash Used for Financing Activities (1,300) Net Increase (Decrease) in Cash 800 Cash Balance, December 31, 2015 4,100 Cash Balance, December 31, 2016 $ 4,900
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S14-8, cont.
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