Recitation solutions Ch 16

Recitation solutions Ch 16 - (20-30 min.) E 16-20 Vitamins...

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(20-30 min.) E 16-20 Vitamins Plus, Inc. Statement of Cash Flows Year Ended June 30, 2006 Cash flows from operating activities: Net income $43,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation $ 29,000 Decrease in accounts receivable 15,000 Increase in inventory (7,000) Increase in accounts payable 13,000 Decrease in accrued liabilities (8,000 ) 42,000 Net cash provided by operating activities 85,000 Cash flows from investing activities: Acquisition of plant assets $(101,000) Cash receipt from sale of land 24,000 Net cash used for investing activities (77,000) Cash flows from financing activities: Cash receipt from issuance of common stock $ 30,000 Payment of note payable (15,000) Payment of dividends (11,000 ) Net cash provided by financing activities 4,000 Net increase in cash $12,000 Cash balance, June 30, 2005 20,000 Cash balance, June 30, 2006 $32,000 Noncash investing and financing activities: Acquisition of plant assets by issuing note payable $15,000
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(10-15 min.) E 16-21 a. Cash dividends = $35,000 Retained Earnings (let Dividends = X) Beginning + Net income Dividends = Ending $45,000 + $60,000 X = $70,000 X = $35,000 Retained Earnings Beginning 45,000 Cash dividends 35,000 Net income 60,000 Ending 70,000 b. Cash receipt = Book value of asset sold, $7,000* + Gain on sale, $4,000 = $11,000 * Plant Assets, Net (let X = Book value sold) Book value Beginning
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Recitation solutions Ch 16 - (20-30 min.) E 16-20 Vitamins...

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