Problem 23-1

The following are Monty Corp.'s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017.

(Question) --Prepare a statement of cash flows for Monty Corp. for the year ended December 31, 2017, using the indirect method.(Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

See attached documents: Problem23-1.jpg and Problem23-1(2).jpg

______________________________________________________________________________________________________________________________________

Problem 23-3

SunlandCompany has not yet prepared a formal statement of cash flows for the 2017 fiscal year. Comparative balance sheets as of December 31, 2016 and 2017, and a statement of income and retained earnings for the year ended December 31, 2017, are presented as follows.

(Question) --Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold.(Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

See attached documents: Problem23-3.jpg and Problem23-3(2).jpg

Problem 23-1 The following are Monty Corp.'s comparative balance sheet accounts at December 31, 2017 and 2016, with a column showing the increase (decrease) from 2016 to 2017. COMPARATIVE BALANCE SHEETS 2017 Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Investment in Myers Co. Loan receivable Total assets Accounts payable Income taxes payable Dividends payable Lease liabililty Common stock, $1 par Paid-in capital in excess of parcommon stock Retained earnings Total liabilities and stockholders' equity 2016 Increase (Decrease) $808,400 1,117,000 1,861,000 3,286,500 (1,153,400 ) 312,100 247,900 $703,500 1,168,800 1,731,000 2,949,500 (1,039,600 ) 272,900 $104,900 (51,800 ) 130,000 337,000 (113,800 ) 39,200 247,900 $6,479,500 $5,786,100 $693,400 $1,007,300 29,700 79,200 396,700 500,000 1,485,200 2,981,400 $954,200 49,700 99,500 500,000 1,485,200 2,697,500 $6,479,500 $5,786,100 $53,100 (20,000 ) (20,300 ) 396,700 283,900 $693,400 Additional information: 1. On December 31, 2016, Monty acquired 25% of Myers Co.'s common stock for $272,900. On that date, the carrying value of Myers's assets and liabilities, which approximated their fair values, was $1,091,600. Myers reported income of $156,800 for the year ended December 31, 2017. No dividend was paid on Myers's common stock during the year. 2. During 2017, Monty loaned $296,700 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $48,800, plus interest at 10%, on December 31, 2017. 3. On January 2, 2017, Monty sold equipment costing $59,700, with a carrying amount of $37,600, for $40,300 cash. 4. On December 31, 2017, Monty entered into a capital lease for an office building. The present value of the annual rental payments is $396,700, which equals the fair value of the building. Monty made the first rental payment of $59,600 when due on January 2, 2018. 5. Net income for 2017 was $363,100. 6. Monty declared and paid the following cash dividends for 2017 and 2016. 2017 Declared Paid Amount December 15, 2017 February 28, 2018 $79,200 2016 December 15, 2016 February 28, 2017 $99,500 Prepare a statement of cash flows for Monty Corp. for the year ended December 31, 2017, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Problem 23-3 Sunland Company has not yet prepared a formal statement of cash flows for the 2017 fiscal year. Comparative balance sheets as of December 31, 2016 and 2017, and a statement of income and retained earnings for the year ended December 31, 2017, are presented as follows. SUNLAND COMPANY STATEMENT OF INCOME AND RETAINED EARNINGS FOR THE YEAR ENDED DECEMBER 31, 2017 ($000 OMITTED) Sales revenue Expenses Cost of goods sold Salaries and benefits Heat, light, and power Depreciation Property taxes Patent amortization Miscellaneous expenses Interest $3,820 $1,200 740 80 90 20 20 10 30 Income before income taxes Income taxes 2,190 1,630 815 Net income Retained earningsJan. 1, 2017 815 320 1,135 615 Stock dividend declared and issued Retained earningsDec. 31, 2017 $520 SUNLAND COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31 ($000 OMITTED) Assets 2017 2016 Current assets Cash U.S. Treasury notes (available-for-sale) Accounts receivable Inventory $333 10 790 730 $100 50 520 560 1,863 1,230 150 920 70 600 (200 ) (110 ) 110 130 Total current assets Long-term assets Land Buildings and equipment Accumulated depreciationbuildings and equipment Patents (less amortization) Total long-term assets Total assets Liabilities and Stockholders' Equity Current liabilities Accounts payable $452 $350 980 690 $2,843 $1,920 Income taxes payable Notes payable Total current liabilities Long-term notes payable due 2019 Total liabilities 36 30 320 320 808 700 190 190 998 890 1,325 710 520 320 1,845 1,030 $2,843 $1,920 Stockholders' equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity Prepare a statement of cash flows using the direct method. Changes in accounts receivable and accounts payable relate to sales and cost of goods sold. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) MONTY CORP Statement of Cash Flows for the year ended Dec 31 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to Net cash provide by operating Activity Depreciation Expenses Gain on Equipment Sold Income from Meyers Investment Decrease in Accounts receivable Increase in inventories Increase in Accounts payable Decrease in Income Tax Payable 135900 -2700 -39200 51800 -130000 53100 -20000 Net cash provided by operatiing activities Cash flows from investing activities Equipment Sold Loan Given to TLC Co Principal Portion of Loan Recievable realised Net cash used in investing activities Cash flows from financing activities Payment of Cash dividend Net cash provided by financing activities Net Increase in cash and cash equivalents Cash balance at beginning of period Cash balance at end of period Noncash investing activities Purchase Building on capital lease 40300 -296700 48800 -99500 363,100 48900 412000 -207600 -99,500 104,900 703,500 $808,400 $396,700 MONTY CORP Statement of Cash Flows for the year ended Dec 31 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to Net cash provide by operating Activity Depreciation Expenses Gain on Equipment Sold Income from Meyers Investment Decrease in Accounts receivable Increase in inventories Increase in Accounts payable Decrease in Income Tax Payable 135900 -2700 -39200 51800 -130000 53100 -20000 Net cash provided by operatiing activities Cash flows from investing activities Equipment Sold Loan Given to TLC Co Principal Portion of Loan Recievable realised Net cash used in investing activities Cash flows from financing activities Payment of Cash dividend Net cash provided by financing activities Net Increase in cash and cash equivalents Cash balance at beginning of period Cash balance at end of period Noncash investing activities Purchase Building on capital lease 40300 -296700 48800 -99500 363,100 48900 412000 -207600 -99,500 104,900 703,500 $808,400 $396,700 Sunland Company Statement of Cash Flows For the Year Ending December 31, 2017 ($000 omitted) Cash flows from operating activities Cash reciept from customer Payment To Supplier Payment For Income Taxes Payment For Salaries & Benifiet Payment for Heat Light & Power Payment of Property taxes Payment For Miscellaneous Expenses Payment For Interest 3,550.00 -1268 -809 -740 -80 -20 -10 -30 -2957 593.00 Net cash provided by operatiing activities Cash flows from investing activities Sale of US treasury notes Purchase of Land Purchase of Building and equipment Net cash used in investing activities 40 -80 -320 -360 Net Increase in cash Cash balance at beginning of period Cash balance at end of period 233.00 100 333 Working Cash receipts from customers Sales revenue Add : Beginning Account Recievable Less :Ending Account Recievable Cash receipts from customers $3,820.00 $520.00 $790.00 3,550.00 Cash paid to suppliers Cost of goods sold Add: Ending Inventory Less : Beginning Inventory Purchases Add : Beginning Account Payable Less :Ending Account payable Cash paid to suppliers $1,200.00 $730.00 $560.00 1,370.00 $350.00 $452.00 1,268.00 MONTY CORP Statement of Cash Flows for the year ended Dec 31 2017 Cash flows from operating activities Net income Adjustments to reconcile net income to Net cash provide by operating Activity Depreciation Expenses Gain on Equipment Sold Income from Meyers Investment Decrease in Accounts receivable Increase in inventories Increase in Accounts payable Decrease in Income Tax Payable 135900 -2700 -39200 51800 -130000 53100 -20000 Net cash provided by operatiing activities Cash flows from investing activities Equipment Sold Loan Given to TLC Co Principal Portion of Loan Recievable realised Net cash used in investing activities Cash flows from financing activities Payment of Cash dividend Net cash provided by financing activities Net Increase in cash and cash equivalents Cash balance at beginning of period Cash balance at end of period Noncash investing activities Purchase Building on capital lease 40300 -296700 48800 -99500 363,100 48900 412000 -207600 -99,500 104,900 703,500 $808,400 $396,700 Sunland Company Statement of Cash Flows For the Year Ending December 31, 2017 ($000 omitted) Cash flows from operating activities Cash reciept from customer Payment To Supplier Payment For Income Taxes Payment For Salaries & Benifiet Payment for Heat Light & Power Payment of Property taxes Payment For Miscellaneous Expenses Payment For Interest 3,550.00 -1268 -809 -740 -80 -20 -10 -30 -2957 593.00 Net cash provided by operatiing activities Cash flows from investing activities Sale of US treasury notes Purchase of Land Purchase of Building and equipment Net cash used in investing activities 40 -80 -320 -360 Net Increase in cash Cash balance at beginning of period Cash balance at end of period 233.00 100 333 Working Cash receipts from customers Sales revenue Add : Beginning Account Recievable Less :Ending Account Recievable Cash receipts from customers $3,820.00 $520.00 $790.00 3,550.00 Cash paid to suppliers Cost of goods sold Add: Ending Inventory Less : Beginning Inventory Purchases Add : Beginning Account Payable Less :Ending Account payable Cash paid to suppliers $1,200.00 $730.00 $560.00 1,370.00 $350.00 $452.00 1,268.00