Chapter 5 Exercises

Chapter 5 Exercises - E5-13Correct. (Statement of Cash...

Info iconThis preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: E5-13Correct. (Statement of Cash FlowsClassifications) The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as: 1.Operating activityadd to net income. 2.Operating activitydeduct from net income. 3.Investing activity. 4.Financing activity. 5.Reported as significant noncash activity.The transactions are as follows. (a)Issuance of capital stock.4(b)Purchase of land and building.3(c)Redemption of bonds.4(d)Sale of equipment.3(e)Depreciation of machinery. 1(f)Amortization of patent.1(g)Issuance of bonds for plant assets. 5(h)Payment of cash dividends. 4(i)Exchange of furniture for office equipment.5(j)Purchase of treasury stock. 4(k)Loss on sale of equipment.1(l)Increase in accounts receivable during the year.2(m)Decrease in accounts payable during the year.2BE5-12Correct. Keyser Beverage Company reported the following items in the most recent year. Net income$40,000 Dividends paid5,000 Increase in accounts receivable 10,000 Increase in accounts payable7,000 Purchase of equipment (capital expenditure)8,000 Depreciation expense4,000 Issue of notes payable20,000Compute net cash flow provided by operating activities and the net change in cash during the year. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. For negative numbers use either a negative sign preceding the number e.g. -45 or parenthesis e.g. (45).) Cash Flow StatementOperating Activities Net income$ 40000 Increase in Accounts Payable7000 Depreciation Expense4000 Increase in Accounts Receivable(10000) Net cash from operating activities41000 Investing Activities Purchase of Equipment(8000) Financing Activities Issue Notes Payable20000 Dividends(5000) Net cash flow from financing activities15000 Net change in cash$ 48000 Compute free cash flow. Free cash flow$ 28000 BE5-14Correct. Martinez Corporation engaged in the following cash transactions during 2010. Sale of land and building$191,000 Purchase of treasury stock40,000 Purchase of land37,000 Payment of cash dividend95,000 Purchase of equipment53,000 Issuance of common stock147,000 Retirement of bonds100,000Compute the net cash provided (used) by investing activities. (List multiple entries from the largest positive to the smallest positive amount followed by the most negative to the least negative amount, e.g. 15, 14, 10, -17, -5, -1. For negative numbers use either a negative sign preceding the number, e.g. -45 or parenthesis, e.g. (45).) Sale of land and building...
View Full Document

Page1 / 23

Chapter 5 Exercises - E5-13Correct. (Statement of Cash...

This preview shows document pages 1 - 5. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online