A

1 Homework Assignment for Chapter 5: Statement of Cash Flows

2
3 Use the following information about Lund Corporation for 2013 to prepare a statement of
4 cash flows under the indirect method.
5
6
Accounts payable increase
$9,000
7
Accounts receivable increase
4,000
8
Accrued liabilities decrease
3,000
9
Amortization expense
6,000
10
Cash balance, beginning of of 2013
22,000
11
Cash balance, end of 2013
15,000
12
Cash paid as dividends
29,000
13
Cash paid to purchase land
90,000
14
Cash paid to retire bonds payable at par
60,000
15
Cash received from issuance of common stock
35,000
16
Cash received from sale of equipment
17,000
17
Depreciation expense
29,000
18
Gain on sale of equipment
4,000
19
Inventory decrease
13,000
20
Net income
76,000
21
Prepaid expenses increase
2,000

A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49

Use the following information about Wolff Company for 2013 to prepare a statement of
cash flows under the indirect method.
Wolff Company
Income Statement
For the Year Ended December 31,2013
Sales
Cost of goods sold
Gross Margin
Expenses:
Wages expense
Insurance expense
Depreciation expense
Interest expense
Operating income
Income taxes
Net income

$635,000
430,000
205,000
86,000
8,000
17,000
9,000

Wolff Company
Balance Sheet
12/31/2013

120,000
85,000
29,000
$56,000

12/31/2012

Assets
Cash
Accounts receivable
Inventory
Prepaid insurance
Plant assets
Accumulated depreciation
Total assets

$11,000
41,000
90,000
5,000
250,000
(68,000)
$329,000

$5,000
32,000
60,000
7,000
195,000
(51,000)
$248,000

Liabilities and Stockholders' Equity

Accounts payable
Wages payable
Income tax payable
Bonds payable
Common stock
Retained earnings
Total liabilities and equity

$7,000
9,000
7,000
130,000
90,000
86,000
$329,000

$10,000
6,000
8,000
75,000
90,000
59,000
$248,000

Other information:
Cash dividends of $29,000 were declared and paid during 2013
Plant assets were purchased for cash
Bonds payable were issued for cash
Bond interest is paid semiannually on June 30 and December 31
Accounts payable relate to merchandise purchases.

A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48

Use the following information about ARCTIC Company for 2013 to prepare a statement of
cash flows under the indirect method.
ARCTIC Company
Income Statement
For the Year Ended December 31,2013
Sales
Cost of goods sold
Gross Margin
Expenses:
Wages expense
Advertising expense
Depreciation expense
Interest expense
Operating income
Gain on sale of land
Net income

$728,000
534,000
194,000
190,000
31,000
22,000
18,000

ARCTIC Company
Balance Sheet
12/31/2013

261,000
(67,000)
25000
(42,000)

12/31/2012

Assets
Cash
Accounts receivable
Inventory
Prepaid insurance
Plant assets
Accumulated depreciation
Total assets

$49,000
42,000
107,000
10,000
360,000
(78,000)
$490,000

$28,000
50,000
113,000
13,000
222,000
(56,000)
$370,000

Liabilities and Stockholders' Equity

Accounts payable
Interest payable
Bonds payable
Common stock
Retained earnings
Treasury stock
Total liabilities and equity

$17,000
6,000
200,000
245,000
52,000
(30,000)
$490,000

$31,000

245,000
94,000
$370,000

Other information:
During 2013, Arctic sold land for $70,000 cash that had originally cost $45,000
Arctic purchased equipment for cash
Acquired treasury stock for cash
Issued bonds payable for cash in 2013
Accounts payable relate to merchandise purchases

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
ly cost $45,000
45
46
47
48

A
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

Use the following information for Rainbow Company for 2013 to prepare a statement of
cash flows under the indirect method.
RAINBOW Company
Income Statement
For the Year Ended December 31,2013
Sales
Dividend income

$750,000
15,000
765,000

Cost of goods sold

Wages & other operating expense
Depreciation expense
Patent amortization expense
Interest expense
Income tax expense
Loss on sale of equipment
Gain on sale of investments
Net income

440,000
130,000
39,000
7,000
13,000
44,000
5,000

678,000
10000
$97,000

RAINBOW Company
Balance Sheet
12/31/2013
Assets
Cash & cash equivalents
Accounts receivable
Inventory
Prepaid insurance
Long-term investments
Fair value adjustment to investments
Land
Buildings
Accumulated depr-Buildings
Equipment
Accumulated depr-equipment
Patents
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Interest payable
Income tax payable
Bonds payable
Preferred stock ($100 par value)
Common stock ($5 par value)

$19,000
40,000
103,000
10,000

12/31/2012

190,000
445,000
(91,000)
179,000
(42,000)
50,000
$903,000

$25,000
30,000
77,000
6,000
50,000
7,000
100,000
350,000
(75,000)
225,000
(46,000)
32,000
$781,000

$20,000
6,000
8,000
155,000
100,000
379,000

$16,000
5,000
10,000
125,000
75,000
364,000

47
Paid in capital in excell of par-Common
133,000
124,000
48
Retained earnings
102,000
55,000
49
Unrealized gain on investments
7,000
50 Total liabilities and equity
$903,000
$781,000
51
52
53 Other information:
54
1 Sold long-term investments costing $50,000 for $60,000 cash. Unrealized gains totaling
55
$7,000 related to these investment had been recorded in earlier years. At year-end,
56
the fair value adjustment and unrealized gain account balances were eliminated.
57
2 Purchased land for cash.
58
3 Capitalized an expenditure made to improve the building.
59
4 Sold equipment for $14,000 cash that originally cost $46,000 and had $27,000
60
accumulated depreciation.
61
5 Issued bonds payable at face value for cash.
62
6 Acquired a patend with a fair value of $25,000 by issuing 250 shared of preferred stock at p
63
7 Declared and paid a $50,000 cash dividend
64
8 Issued 3,000 shares of commom stock for cash at $8 per share.
65
9 Recorded depreciation of $16,000 on buildings and $23,000 on equipment.

H
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

47
48
49
50
51
52
53
54 totaling
nrealized gains
55
years. At year-end,
56
were eliminated.
57
58
59
d had $27,000
60
61
62
ared of preferred
stock at par value.
63
64
65