Use the information from BE23-4 for Bloom Corporation.
Prepare the cash flows from operating activities section of Blooms 2014 statement of cash flows
using the indirect method.
Cash flows from operating activities
What conditions must exist for the retail inventory method to provide valid results?
The validity of the retail inventory method is dependent upon
(1) The composition of the inventory remaining approximately the same at the end of the pe
What are the major uses of the gross profit method?
The major uses of the gross profit method are:
(1) It provides an approximation of the ending inventory which the auditor might use for testing
validity of physical inventory count;
A fire destroys all of the merchandise of Assante Company on February 10, 2014. Presented
below is information compiled up to the date of the fire.
What is the approximate inventory on February 10, 2014?
Inventory, January 1, 2014.
Presented below is information related to Ricky Henderson Company.
Compute the inventory by the conventional retail inventory method.
Add: Net markups
Collinsworth Co. reported sales on an accrual basis of $100,000. If accounts receivable increased
$30,000 and the allowance for doubtful accounts increased $9,000 after a write-off of $2,000,
compute cash sales.
Accrual basis sales.
Kumar Inc. uses a perpetual inventory system. At January 1, 2014, inventory was $214,000 at
both cost and market value. At December 31, 2014, the inventory was $286,000 at cost and
$265,000 at market value. Prepare the necessary December 31 entr
In 2014, Wild Corporation reported a net loss of $70,000. Wilds only net income adjustments
were depreciation expense $81,000, and increase in accounts receivable $8,100. Compute Wilds
net cash provided (used) by operating activities.
Boyne Inc. had beginning inventory of $12,000 at cost and $20,000 at retail. Net purchases were
$120,000 at cost and $170,000 at retail. Net markups were $10,000; net markdowns were
$7,000; and sales revenue was $147,000. Compute ending inventor
Each of the following gross profit percentages is expressed in terms of cost.
Indicate the gross profit percentage in terms of sales for each of the above.
100% + 20%
= 16.67% OR 16
During 2014, Pretenders Furniture Company purchases a carload of wicker chairs. The
manufacturer sells the chairs to Pretenders for a lump sum of $59,850 because it is discontinuing
manufacturing operations and wishes to dispose of its entire st
Presented below is information related to Rembrandt Inc.s inventory.
Determine the following:
(a) The two limits to market value (i.e., the ceiling and the floor) that should be used in the
lower-of-cost-or-market computation for skis,
(b) The c
Data for Anita Baker Company are presented in E23-18.
Prepare entries in journal form for all adjustments that should be made on a worksheet for a
statement of cash flows.
E23-20 (Worksheet Analysis of Selected Transactions) The tra
Moxley Corporation had January 1 and December 31 balances as follows.
For 2014, cost of goods sold was $500,000. Compute Moxleys 2014 cash payments to suppliers.
Cost of goods sold.
Add: Increase in inventory ($113,000 $95,000).
Fosbre Corporations April 30 inventory was destroyed by fire. January 1 inventory was
$150,000, and purchases for January through April totaled $500,000. Sales revenue for the same
period were $700,000. Fosbres normal gross profit percentage is
At January 1, 2014, Eikenberry Inc. had accounts receivable of $72,000. At December 31, 2014,
accounts receivable is $54,000. Sales revenue for 2014 total $420,000. Compute Eikenberrys
2014 cash receipts from customers.
Stansfield Corporation had the following activities in 2014.
1. Payment of accounts payable $770,000. 4. Collection of note receivable $100,000.
2. Issuance of common stock $250,000. 5. Issuance of bonds payable $510,000.
3. Payment of dividends
Kemper Company signed a long-term noncancelable purchase commitment with a major supplier
to purchase raw materials in 2015 at a cost of $1,000,000. At December 31, 2014, the raw
materials to be purchased have a market value of $950,000. Prepare
Deere and Company reported inventory in its balance sheet as follows.
What additional disclosures might be necessary to present the inventory fairly?
Information relative to the composition of the inventory (i.
The accounts below appear in the ledger of Anita Baker Company.
From the postings in the accounts above, indicate how the information is reported on a statement
of cash flows by preparing a partial statement of cash flows using the
In 2014, Leppard Inc. issued 1,000 shares of $10 par value common stock for land worth
(a) Prepare Leppards journal entry to record the transaction.
(b) Indicate the effect the transaction has on cash.
(c) Indicate how the transaction i
Identify and explain the major steps involved in preparing the statement of cash flows.
Preparing the statement of cash flows involves three major steps:
Determine the change in cash. This is simply the difference between the beginni
Marvin Gaye Company has been having difficulty obtaining key raw materials for its
manufacturing process. The company therefore signed a long-term non-cancelable purchase
commitment with its largest supplier of this raw material on November 30,
What factors might call for inventory valuation at sales prices (net realizable value or market
An exception to the normal recognition rule occurs where (1) there is a controlled market with a
quoted price applicable to specific
The financial statements of ConAgra Foods, Inc.s 2012 annual report disclose the following
(a) Inventory turnover and
(b) The average days to sell inventory for 2012 and 2011.