Indicate for each of the following what should be disclosed on a statement of cash flows (SCF) (indirect method). If not disclosed, write "Not shown." If an item is a noncash transaction that should be shown separately. write "noncash." If an item is added to net income, write "Add," and if an item is deducted from net income, write "Deduct." Show financing and investing outflows in parentheses. For example, an answer might be Deduct S4,700 or Investing ($31,000). There is more than one answer for some items. (a) For 2015, income before an extraordinary loss was $460,000. A tornado damaged a building and its contents. The proceeds from insurance companies totaled $120,000. which was S50,000 less than the book values. The tax rate was 30%. (Show the calculation of the net income shown on the SCF, and indicate how other items should be shown on the SCF.) (b) Amortization of bond premium, S1,100. (c) The balance in Retained Earnings was S875.000 on December 31. 2014 and S1.310,000 on December 31, 2015. Net income was $1,170,000. A stock dividend was declared and distributed which increased common stock $325,000 and paid-in capital $170,000. (Show calculation of the cash dividend and indicate how it and the stock dividend would be shown on the SCF.) (d) Equipment, that cost $115,000 and had accumulated depreciation of $53.000, was sold for $66,000. (e) The deferred tax liability increased $18,000. (f) Issued 3,000 shares of preferred stock. $50 par, with a market value of S110 per share for land. (Show the amount also.) Indicate for each of the following what should be disclosed on a statement of cash flows (SCF) (indirect method). If not disclosed, write "Not shown." If an item is a noncash transaction that should be shown separately. write "noncash." If an item is added to net income, write "Add," and if an item is deducted from net income, write "Deduct." Show financing and investing outflows in parentheses. For example, an answer might be Deduct S4,700 or Investing ($31,000). There is more than one answer for some items. (a) For 2015, income before an extraordinary loss was $460,000. A tornado damaged a building and its contents. The proceeds from insurance companies totaled $120,000. which was S50,000 less than the book values. The tax rate was 30%. (Show the calculation of the net income shown on the SCF, and indicate how other items should be shown on the SCF.) (b) Amortization of bond premium, S1,100. (c) The balance in Retained Earnings was S875.000 on December 31. 2014 and S1.310,000 on December 31, 2015. Net income was $1,170,000. A stock dividend was declared and distributed which increased common stock $325,000 and paid-in capital $170,000. (Show calculation of the cash dividend and indicate how it and the stock dividend would be shown on the SCF.) (d) Equipment, that cost $115,000 and had accumulated depreciation of $53.000, was sold for $66,000. (e) The deferred tax liability increased $18,000. (f) Issued 3,000 shares of preferred stock. $50 par, with a market value of S110 per share for land. (Show the amount also.)
