CHAPTER 23 ASSIGNMENT Credit will be withheld for each problem submitted without back-up; and not submitted on spreadsheet. PROBLEM # 1 The income statement of Green Company is shown below. GREEN COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales $755,000 Cost of goods sold 543,000 Gross profit 212,000 Operating expenses Selling expenses $52,000 Administrative expenses 89,000 141,000 Net income $71,000 Additional information: 1. Accounts receivable decreased $63,000 during the year. 2. Inventory increased $38,000 during the year. 3. Prepaid expenses increased $11,000 during the year. 4. Accounts payable to increased $25,000 during the year. 5. Accrued expenses payable increased $8,000 during the year. 6. Administrative expenses include depreciation expense of $25,000. Instruction: Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, for Green Company, using the indirect method. PROBLEM 2 Presented below is the income statement of Car, Inc.: Sales $380,000 Cost of goods sold 225,000 Gross profit $155,000 Operating expenses 85,000 Income before income taxes 70,000 Income taxes 28,000 Net income $ 42,000 In addition, the following information related to net changes in working capital is presented: Debit Credit Cash $12,000 Accounts receivable 25,000 Inventories $19,400 Salaries payable (operating expenses) 8,000 Accounts payable 12,000 Income taxes payable 3,000 The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600. Instruction: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows using the direct method. PROBLEM # 3 Park, Inc. has prepared the following comparative balance sheets for 2012 and 2013: 2013 2012 Cash $ 287,000 $ 153,000 Accounts receivable 149,000 117,000 Inventory 150,000 180,000 Prepaid expenses 18,000 27,000 Plant assets 1,280,000 1,050,000 Accumulated depreciation (450,000) (375,000) Patent 153,000 174,000 $1,587,000 $1,326,000 Accounts payable $ 153,000 $ 168,000 Accrued liabilities 60,000 42,000 Mortgage payable 450,000 Preferred stock 525,000 Additional paid-in capitalpreferred 120,000 Common stock 600,000 600,000 Retained earnings 129,000 66,000 $1,587,000 $1,326,000 1.The Accumulated Depreciation account has been credited only for the depreciation expense for the period. 2. The Retained Earnings account has been charged for dividends of $158,000 and credited for the net income for the year. The income statement for 2013 is as follows: Sales $1,980,000 Cost of sales 1,089,000 Gross profit 891,000 Operating expenses 670,000 Net income $ 221,000 Instruction: From the information above, prepare a statement of cash flows (indirect method) for Park, Inc. for the year ended December 31, 2013