ch13 - SOLUTIONS TO EXERCISES—SET B EXERCISE 13-1B 1(a...

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Unformatted text preview: SOLUTIONS TO EXERCISES—SET B EXERCISE 13-1B 1. (a) Cash....................................................... 18,000 Land................................................ 12,000 Gain on Disposal........................... 6,000 (b) The cash receipt ($18,000) is reported in the investing section. The gain ($6,000) is deducted from net income in the operating section. 2. (a) Cash........................................................................... 25,000 Common Stock.................................................. 25,000 (b) The cash receipt ($25,000) is reported in the financing section. 3. (a) Depreciation Expense.............................................. 20,000 Accumulated Depreciation.............................. 20,000 (b) Depreciation expense ($20,000) is added to net income in the operating section. 4. (a) Salaries Expense...................................................... 12,000 Cash................................................................... 12,000 (b) Salaries expense is not reported separately on the statement of cash flows. It is part of the computation of net income in the income statement, and is included in the net income amount on the statement of cash flows. 5. (a) Equipment................................................................. 10,000 Common Stock................................................. 1,000 Paid-in Capital in Excess of Par Value.......... 9,000 (b) The issuance of common stock for equipment ($10,000) is reported as a noncash financing and investing activity at the bottom of the statement of cash flows. 6. (a) Cash.......................................................................... 2,000 Loss on Disposal..................................................... 1,000 Accumulated Depreciation..................................... 7,000 Equipment................................................ 10,000 (b) The cash receipt ($2,000) is reported in the investing section. The loss ($1,000) is added to net income in the operating section. 13-1 EXERCISE 13-2B WYNNE COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2008 Cash flows from operating activities Net income................................................................. $155,000 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense....................................... $25,000 Loss on sale of equipment............................... 5,000 Decrease in accounts receivable.................... 10,000 Decrease in prepaid expenses........................ 4,000 Increase in accounts payable.......................... 12,000 56,000 Net cash provided by operating activities........ $211,000 EXERCISE 13-3B CARPENTER INC....
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This note was uploaded on 12/12/2009 for the course ACCT 2102 taught by Professor Constable,d during the Fall '08 term at Georgia Perimeter.

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ch13 - SOLUTIONS TO EXERCISES—SET B EXERCISE 13-1B 1(a...

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