Hi, can anyone help with the following questions that I have attached

Scanned by CamScanner Scanned by CamScanner Solution1 Smith Company Cash Flow Statement For the year ended Dec 31, 2016 Account Titles Cash flow from Operating Activities Net Income (increase in retained earnings) Add: Depreciation Cash flow Before working capital changes Less: Increase in Account Receivable Add: Decrease in Inventory Add: Decrease in Prepaid expenses Add: Increase in Account payable Add: Increase in Salary payable Less: Decrease in Accrued liability Cash flow from Operating Activities (A) Amount Amount $13,700 $10,000 $23,700 ($16,700) $14,500 $2,200 $4,200 $8,900 ($1,300) $11,800 $35,500 Cash flow from Investing Activities Purchase of Land Purchase of Equipment Cash flow from Investing Activities (B) ($47,000) ($22,800) Cash flow from Financing Activities Issue of Note payable Issue of Common Stock Cash flow from Financing Activities (C) $14,000 $24,200 Net Increase in Cash (A + B +C) Add: Cash Balance on Dec 31, 2015 Cash Balance on Dec 31, 2016 ($69,800) $38,200 $3,900 $14,000 $17,900 Solution2 a. Date 2010 2011 b. 2010 2011 c. 2010 2011 Accoun Titles & Explanation Pension Expense Cash Annual lease payment Less: Executory costs Annual rent-net $36,320 Pension Expense Cash Prepaid/Accrued Pension Cost $34,000 Pension Expense Cash Prepaid/Accrued Pension Cost $36,680 Pension Expense Prepaid/Accrued Pension Cost Cash $34,000 $4,000 Pension Expense Prepaid/Accrued Pension Cost Cash $35,840 $2,160 Present value of minimum rents Present value of guaranteed residual value Present value of minimum lease payments b. $19,000 ($1,000) $18,000 $125,914.45 $6,336 $132,251 Credit $34,000 Pension Expense Cash Solution3 a. Debit $34,000 $36,320 $31,000 $3,000 $31,000 $5,680 $38,000 $38,000 Lease is a capital lease. The lease term is greater than 75% of the economic life of the equipment (10/12 = 83.33%), and the present value of the lease payments is greater than 90% of the equipment's fair value ($132,250/$140,000 = 94.5%). c. S. No. 1 2 3 Account Titles & Explanation Leased Equipment Under Capital Leases Capital Lease Obligation Debit $132,250 Credit $132,250 Capital Lease Obligation Executory Expense (or Prepaid) Cash $18,000 $1,000 Depreciation Expense Accumulated Depreciation: Lease Equipment $11,725 Interest Expense Accrued Interest on Capital Lease Obligation $10,282 $19,000 $11,725 $10,282 Solution-1 Smith Company Cash Flow Statement For the year ended Dec 31, 2016 Account Titles Cashflow from Operating Activities Net Income (increase in retained earnings) Add: Depreciation Cashflow Before working capital changes Less: Increase in Account Receivable Add: Decrease in Inventory Add: Decrease in Prepaid expenses Add: Increase in Account payable Add: Increase in Salary payable Less: Decrease in Accrued liability Cashflow from Operating Activities (A) Cashflow from Investing Activities Purchase of Land Purchase of Equipment Cashflow from Investing Activities (B) Cashflow from Financing Activities Issue of Note payable Issue of Common Stock Cashflow from Financing Activities (C) Net Increase in Cash (A + B +C) Add: Cash Balance on Dec 31, 2015 Cash Balance on Dec 31, 2016 Solution-2 a. Date 2010 2011 b. 2010 2011 c. 2010 2011 Solution-3 a. Annual lease payment Less: Executory costs Annual rent-net Present value of minimum rents Present value of guaranteed residual value Present value of minimum lease payments b. Lease is a capital lease. The lease term is greater than 75% of the economic life of the equipment (10/12 = 83.33% of the equipment's fair value ($132,250/$140,000 = 94.5%). c. S. No. 1 2 3 Smith Company Cash Flow Statement For the year ended Dec 31, 2016 Amount Amount $13,700 $10,000 $23,700 ($16,700) $14,500 $2,200 $4,200 $8,900 ($1,300) $11,800 $35,500 ($47,000) ($22,800) ($69,800) $14,000 $24,200 $38,200 $3,900 $14,000 $17,900 Accoun Titles & Explanation Pension Expense Cash Debit $34,000 Pension Expense Cash $36,320 Pension Expense Cash Prepaid/Accrued Pension Cost $34,000 Pension Expense $36,680 Credit $34,000 $36,320 $31,000 $3,000 Cash Prepaid/Accrued Pension Cost $31,000 $5,680 Pension Expense Prepaid/Accrued Pension Cost Cash $34,000 $4,000 Pension Expense Prepaid/Accrued Pension Cost Cash $35,840 $2,160 $38,000 $38,000 $19,000 ($1,000) $18,000 $125,914.45 $6,336 $132,251 r than 75% of the economic life of the equipment (10/12 = 83.33%), and the present value of the lease payments is greater than 90% 00 = 94.5%). Accoun Titles & Explanation Leased Equipment Under Capital Leases Capital Lease Obligation Debit $132,250 Capital Lease Obligation Executory Expense (or Prepaid) Cash $18,000 $1,000 Depreciation Expense Accumulated Depreciation: Lease Equipment $11,725 Interest Expense Accrued Interest on Capital Lease Obligation $10,282 Credit $132,250 $19,000 $11,725 $10,282 nts is greater than 90% Solution1 Smith Company Cash Flow Statement For the year ended Dec 31, 2016 Account Titles Cash flow from Operating Activities Net Income (increase in retained earnings) Add: Depreciation Cash flow Before working capital changes Less: Increase in Account Receivable Add: Decrease in Inventory Add: Decrease in Prepaid expenses Add: Increase in Account payable Add: Increase in Salary payable Less: Decrease in Accrued liability Cash flow from Operating Activities (A) Amount Amount $13,700 $10,000 $23,700 ($16,700) $14,500 $2,200 $4,200 $8,900 ($1,300) $11,800 $35,500 Cash flow from Investing Activities Purchase of Land Purchase of Equipment Cash flow from Investing Activities (B) ($47,000) ($22,800) Cash flow from Financing Activities Issue of Note payable Issue of Common Stock Cash flow from Financing Activities (C) $14,000 $24,200 Net Increase in Cash (A + B +C) Add: Cash Balance on Dec 31, 2015 Cash Balance on Dec 31, 2016 ($69,800) $38,200 $3,900 $14,000 $17,900 Solution2 a. Date 2010 2011 b. 2010 2011 c. 2010 2011 Accoun Titles & Explanation Pension Expense Cash Annual lease payment Less: Executory costs Annual rent-net $36,320 Pension Expense Cash Prepaid/Accrued Pension Cost $34,000 Pension Expense Cash Prepaid/Accrued Pension Cost $36,680 Pension Expense Prepaid/Accrued Pension Cost Cash $34,000 $4,000 Pension Expense Prepaid/Accrued Pension Cost Cash $35,840 $2,160 Present value of minimum rents Present value of guaranteed residual value Present value of minimum lease payments b. $19,000 ($1,000) $18,000 $125,914.45 $6,336 $132,251 Credit $34,000 Pension Expense Cash Solution3 a. Debit $34,000 $36,320 $31,000 $3,000 $31,000 $5,680 $38,000 $38,000 Lease is a capital lease. The lease term is greater than 75% of the economic life of the equipment (10/12 = 83.33%), and the present value of the lease payments is greater than 90% of the equipment's fair value ($132,250/$140,000 = 94.5%). c. S. No. 1 2 3 Account Titles & Explanation Leased Equipment Under Capital Leases Capital Lease Obligation Debit $132,250 Credit $132,250 Capital Lease Obligation Executory Expense (or Prepaid) Cash $18,000 $1,000 Depreciation Expense Accumulated Depreciation: Lease Equipment $11,725 Interest Expense Accrued Interest on Capital Lease Obligation $10,282 $19,000 $11,725 $10,282 Solution-1 Smith Company Cash Flow Statement For the year ended Dec 31, 2016 Account Titles Cashflow from Operating Activities Net Income (increase in retained earnings) Add: Depreciation Cashflow Before working capital changes Less: Increase in Account Receivable Add: Decrease in Inventory Add: Decrease in Prepaid expenses Add: Increase in Account payable Add: Increase in Salary payable Less: Decrease in Accrued liability Cashflow from Operating Activities (A) Cashflow from Investing Activities Purchase of Land Purchase of Equipment Cashflow from Investing Activities (B) Cashflow from Financing Activities Issue of Note payable Issue of Common Stock Cashflow from Financing Activities (C) Net Increase in Cash (A + B +C) Add: Cash Balance on Dec 31, 2015 Cash Balance on Dec 31, 2016 Solution-2 a. Date 2010 2011 b. 2010 2011 c. 2010 2011 Solution-3 a. Annual lease payment Less: Executory costs Annual rent-net Present value of minimum rents Present value of guaranteed residual value Present value of minimum lease payments b. Lease is a capital lease. The lease term is greater than 75% of the economic life of the equipment (10/12 = 83.33% of the equipment's fair value ($132,250/$140,000 = 94.5%). c. S. No. 1 2 3 Smith Company Cash Flow Statement For the year ended Dec 31, 2016 Amount Amount $13,700 $10,000 $23,700 ($16,700) $14,500 $2,200 $4,200 $8,900 ($1,300) $11,800 $35,500 ($47,000) ($22,800) ($69,800) $14,000 $24,200 $38,200 $3,900 $14,000 $17,900 Accoun Titles & Explanation Pension Expense Cash Debit $34,000 Pension Expense Cash $36,320 Pension Expense Cash Prepaid/Accrued Pension Cost $34,000 Pension Expense $36,680 Credit $34,000 $36,320 $31,000 $3,000 Cash Prepaid/Accrued Pension Cost $31,000 $5,680 Pension Expense Prepaid/Accrued Pension Cost Cash $34,000 $4,000 Pension Expense Prepaid/Accrued Pension Cost Cash $35,840 $2,160 $38,000 $38,000 $19,000 ($1,000) $18,000 $125,914.45 $6,336 $132,251 r than 75% of the economic life of the equipment (10/12 = 83.33%), and the present value of the lease payments is greater than 90% 00 = 94.5%). Accoun Titles & Explanation Leased Equipment Under Capital Leases Capital Lease Obligation Debit $132,250 Capital Lease Obligation Executory Expense (or Prepaid) Cash $18,000 $1,000 Depreciation Expense Accumulated Depreciation: Lease Equipment $11,725 Interest Expense Accrued Interest on Capital Lease Obligation $10,282 Credit $132,250 $19,000 $11,725 $10,282 nts is greater than 90%