Lesson%204%20Solutions

Lesson%204%20Solutions - Suggested Solutions for ACCT 351...

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Unformatted text preview: Suggested Solutions for ACCT 351 Adapted from Beechy, T. H., & Conrod, J. E. D. (2005). Solutions manual to accompany intermediate accounting, volume 1 (3 rd Can. ed.). Toronto: McGraw-Hill Ryerson. Reproduced with permission. Page 1 of 9 Lesson 4, Chapter 5 Assignment 5-8 (text, pp. 243–244) Rangler Paper Company Cash Flow Statement Year Ended 31 December 20X5 (in ‘000’s) Net cash inflows (outflows) from operating activities: Net income............................................................................................ $103 Adjustments Amortization.................................................................................. 20 Net increase in working capital ..................................................... ( 3 ) 1 Net cash inflow (outflow) from operating activities............................. $120 Cash inflows (outflows) from investing activities: Establishment of restricted construction fund ............................... (60) Disposal of operational asset for cash (at book value).................. 12 Net cash inflow (outflow) from investing activities ............................. (48) Cash inflows (outflows) from financing activities: Paid cash dividend......................................................................... (10) Borrowed on long-term note.......................................................... 25 Payment of bonds payable............................................................. (97 ) Net cash inflow (outflow) from financing activities............................. (82 ) Net increase (decrease) in cash............................................................. (10) Beginning cash balance, 1 January 20X5 ............................................. 62 Ending cash balance, 31 December 20X5 ............................................ $52 1 Changes in current items: Assets Liabilities Increase in Inventory ....... $- 14 Increase in Accounts payable. $ + 5 Increase in Prepaids......... - 3 Decrease in Receivables.. + 7 Decrease in Rent receivable + 2 Net........................................... $- 8 Overall [- 8 + (+ 5)] ............. $- 3 Suggested Solutions for ACCT 351 Page 2 of 9 Assignment 5-9 (text, p. 244) Denton Corporation Cash Flow Statement For the year ended 31 December 20X5 Operations: Net income............................................................................... $690,000 Less: Increase in inventory.................................................... (80,000) Gain on sale of long-term investment.......................... ( 35,000) Plus: Depreciation expense 1 .................................................. 250,000 Amortization of patent................................................. 10,000 Increase in accounts payable........................................ 105,000 Net cash from operations ......................................................... $940,000 Financing activities: Bank loan ................................................................................. Bank loan ....
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This note was uploaded on 09/22/2009 for the course ACCOUNTING ACCT-351 taught by Professor Charko during the Fall '09 term at Humber.

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Lesson%204%20Solutions - Suggested Solutions for ACCT 351...

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