QS 16-3 Indirect: Computing cash flows from operations LO P2

The list includes all balance sheet accounts related to cash from operating activities.

	Case X			Case Y			Case Z
Net income	$	8,000		$	201,000		$	145,200
Depreciation expense		60,100			16,000			48,400
Accounts receivable increase (decrease)		80,200			40,000			(8,000	)
Inventory increase (decrease)		(40,200	)		(20,100	)		20,100
Accounts payable increase (decrease)		48,200			(44,300	)		28,100
Accrued liabilities increase (decrease)		(88,400	)		24,200			(16,000	)

For each of the above separate cases X, Y, and Z, compute cash flows from operations using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

Cash Flows from Operating Activities (Indirect)
	Case X	Case Y	Case Z
Net Income	$8,000	$201,000	$145,200
Adjustments to reconcile net income to net cash provided by operations:
Accounts receivable
Inventories
Accounts payable
Accrued liabilities
	$8,000	$201,000	$145,200

MOSS COMPANY Income Statement For Year Ended December 31, 2017
Sales				$	549,000
Cost of goods sold					357,600
Gross profit					191,400
Operating expenses
Depreciation expense	$	49,000
Other expenses		128,500			177,500
Income before taxes					13,900
Income taxes expense					8,100
Net income				$	5,800

MOSS COMPANY Selected Balance Sheet Information December 31, 2017 and 2016

2017

2016

Current assets

Cash

$

91,150

$

33,300

Accounts receivable

31,500

45,000

Inventory

66,500

55,400

Current liabilities

Accounts payable

43,400

32,200

Income taxes payable

2,700

3,500

Use the information above to calculate this companys cash flows from operating activities using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

Cash flows from operating activities:
Adjustments to reconcile net income to operating cash flow

The plant assets section of the comparative balance sheets of Anders Company is reported below.

ANDERS COMPANY
Comparative Balance Sheets
			2017				2016
Plant assets
Equipment		$	270,000			$	360,000
Accum. Depr.Equipment			(136,000	)			(246,000	)
Equipment, net		$	134,000			$	114,000
Buildings		$	470,000			$	490,000
Accum. Depr.Buildings			(154,000	)			(339,000	)
Buildings, net		$	316,000			$	151,000
During 2017, equipment with a book value of $58,000 and an original cost of $300,000 was sold at a loss of $6,600. 1. How much cash did Anders receive from the sale of equipment?

2. How much depreciation expense was recorded on equipment during 2017? 3. What was the cost of new equipment purchased by Anders during 2017?

The plant assets section of the comparative balance sheets of Anders Company is reported below.

ANDERS COMPANY
Comparative Balance Sheets
			2017				2016
Plant assets
Equipment		$	270,000			$	360,000
Accum. Depr.Equipment			(136,000	)			(246,000	)
Equipment, net		$	134,000			$	114,000
Buildings		$	470,000			$	490,000
Accum. Depr.Buildings			(154,000	)			(339,000	)
Buildings, net		$	316,000			$	151,000

During 2017, a building with a book value of $88,000 and an original cost of $390,000 was sold at a gain of $78,000. 1. How much cash did Anders receive from the sale of the building? 2. How much depreciation expense was recorded on buildings during 2017? 3. What was the cost of buildings purchased by Anders during 2017?

A comparative balance sheet and income statement is shown for Cruz, Inc.

CRUZ, INC. Comparative Balance Sheets December 31, 2017
		2017				2016
Assets
Cash	$	97,400			$	24,400
Accounts receivable, net		41,800				51,700
Inventory		87,400				97,100
Prepaid expenses		5,500				4,400
Total current assets		232,100				177,600
Furniture		111,000				124,700
Accum. depreciationFurniture		(17,200	)			(9,400	)
Total assets	$	325,900			$	292,900
Liabilities and Equity
Accounts payable	$	15,400			$	21,500
Wages payable		9,200				4,900
Income taxes payable		1,500				2,700
Total current liabilities		26,100				29,100
Notes payable (long-term)		30,900				71,600
Total liabilities		57,000				100,700
Equity
Common stock, $5 par value		232,600				185,600
Retained earnings		36,300				6,600
Total liabilities and equity	$	325,900			$	292,900

CRUZ, INC. Income Statement For Year Ended December 31, 2017
Sales				$	501,300
Cost of goods sold					322,600
Gross profit					178,700
Operating expenses
Depreciation expense	$	38,600
Other expenses		91,600			130,200
Income before taxes					48,500
Income taxes expense					17,700
Net income				$	30,800

QS 16-11 Indirect: Computing cash from operations LO P2

Required: Use the indirect method to prepare the cash provided or used from operating activities section only of the statement of cash flows for this company. (Amounts to be deducted should be indicated with a minus sign.)

Cash flows from operating activities
Adjustments to reconcile net income to operating cash flow
Income statement items not affecting cash
Changes in current operating assets and liabilities

Lansing Companys 2017 income statement and selected balance sheet data (for current assets and current liabilities) at December 31, 2016 and 2017, follow.

LANSING COMPANY Income Statement For Year Ended December 31, 2017
Sales revenue	$	148,200
Expenses
Cost of goods sold		59,000
Depreciation expense		20,500
Salaries expense		35,000
Rent expense		10,700
Insurance expense		5,500
Interest expense		5,300
Utilities expense		4,500
Net income	$	7,700

LANSING COMPANY Selected Balance Sheet Accounts
At December 31	2017			2016
Accounts receivable	$	7,300		$	9,200
Inventory		3,680			2,390
Accounts payable		6,100			8,000
Salaries payable		1,220			870
Utilities payable		560			330
Prepaid insurance		430			620
Prepaid rent		560			350

Prepare the cash flows from operating activities section only of the companys 2017 statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

LANSING COMPANY
Cash Flows from Operating ActivitiesIndirect Method
For Year Ended December 31, 2017
Cash flows from operating activities:
Adjustments to reconcile net income to net cash provided by operations: