Directions:
Answer the following questions on a separate Microsoft Word or Excel document.
Explain how you reached the answer or show your work if a mathematical
calculation is needed, or both. Submit your assignment using the assignment
link in Blackboard.
Exercises
E13-3.Cushenberry
Corporation had the following transactions.
1.
Sold
land (cost $12,000) for $15,000.
2.
Issued
common stock at par for $20,000.
3.
Recorded
depreciation on buildings for $17,000.
4.
Paid
salaries of $9,000.
5.
Issued
1,000 shares of $1 par value common stock for equipment worth $8,000.
6.
Sold
equipment (cost $10,000, accumulated depreciation $7,000) for $1,200.
Instructions
For
each transaction above, (a) prepare the journal entry, and (b) indicate how it
would affect the statement of cash flows using the indirect method.
E13-4.Gutierrez
Company reported net income of $225,000 for 2015. Gutierrez also reported
depreciation expense of $45,000 and a loss of $5,000 on the disposal of
equipment. The comparative balance sheet shows a decrease in accounts
receivable of $15,000 for the year, a $17,000 increase in accounts payable, and
a $4,000 decrease in prepaid expenses.
Instructions
Prepare
the operating activities section of the statement of cash flows for 2015. Use
the indirect method.
P13-7A.Presented below are the financial
statements of Nosker Company.
Additional
data:
1.
Dividends
declared and paid were $20,000.
2.
During
the year equipment was sold for $8,500 cash. This equipment cost $18,000
originally and had a book value of $8,500 at the time of sale.
3.
All
depreciation expense, $14,500, is in the operating expenses.
4.
All
sales and purchases are on account.
Instructions
a) Prepare a statement of cash flows using
the indirect method.
b) Compute free cash flow.
