CHAPTER 12 CHECKPOINT PROBLEM #2 Wilma Company had the following information available at the end of 2018: Income Statement For Year Ended December 31, 2018 Sales 441,000 Cost of Goods Sold 205,200 Gross Profit 235,800 Operating Expenses: Depreciation 14,800 Salaries 79,400 Insurance 10,300 Utilities 11,900 Total Operating Expenses 116.400 Operating Income 119,400 Other Expenses/Losses: Gain on Sale of Equipment 4,500 Interest Expense 6.400 (1.900) Income Before Taxes 117,500 Income Tax Expense 19,900 Net Income 97,600 The following additional information is available: a. Investments costing $38,000 were purchased for cash. b. Equipment costing $20,000 with accumualted depreciation of $2,300 was sold for $22,200 cash. c. Equipment costing $90,000 was purchased--S60,000 cash was paid and a $30,000 long-term promissory note was signed for the balance due. d. A cash dividend of $45,000 was declared and paid to shareholders during the year. e. $1,000 of the long-tem note payable was paid. f. 5,000 shares of S1-par value common stock were issued for S3 per share cash. g. Land costing $24.700 was sold for $24,700 cash. REQUIRED: A Complete a set of cash flow T-accounts using the indirect method of computing cash flows from operations. B. Compute the following amounts: Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase (or Decrease) in Cash (Note, the net increase or decrease in cash should be the summation of your operating, investing, and financing activities, but it should also be the difference between the ending and beginning balances of your Cash account.) C. Complete a set of cash flow T-accounts using the direct method of computing cash flows from operations. D. Compute the following amounts: Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Cash Flow from Operating Activities Cash Flow from Investing Activities Cash Flow from Financing Activities Net Increase (or Decrease) in Cash Journal Workpaper to make entries for the given Investing Financing Transactions: DR CR INDIRECT SOLUTION: CASH 15,800 INDIRECT SOLUTION: Accounts Receivable Beg 26,500 Merchandise Inventory Beg 64.600 Beg OPERATING: End 25,800 End 71,100 Beg Prepaid Insurance 14.900 Investments 25,000 End 20,000 63,000 Land 34.700 Beg Beg Equipment 184.000 End 10,000 End 254.000 Accum. Depr.-Equip. 87,100 Accounts Payable 35,500 Beg Beg INVESTING: 99,600 End 30,000 End Salaries Payable 15,500 Beg Income Taxes Payable 13,000 Beg 18,000 End 12,100 End FINANCING: Long-Term Notes Payable 73,000 Beg Common Stock, $1-par 50,000 Beg 102,000 End 55,000 End APIC 52,700 Beg Retained Earnings 38,700 Beg End 26,800 62,700 End 91,300 End CASH 15,800 DIRECT SOLUTION: Accounts Receivable Beg 26,500 Merchandise Inventory Beg 64,600 Beg OPERATING: End 25,800 End 71.1001 Prepaid Insurance Investments 102,000 End 55,000 End APIC 52,700 Retained Earnings 38,700 Beg Beg End 26.800 62,700 End 91,300 End CASH 15,800 DIRECT SOLUTION: Accounts Receivable Beg 26,500 Merchandise Inventory Beg 64,600 Beg OPERATING: End 25,800 End 71,100 Investments Beg Prepaid Insurance 14,900 25,000 End 20.000 63,000 Land 34.700 Beg Beg Equipment 184,000 End 10,000 End 254,000 Accum. Depr.-Equip. 87,100 Beg Accounts Payable 35,500 Beg INVESTING: 99,600 End 30.000 End Salaries Payable 15,500 Income Taxes Payable 13,000 Beg Beg 18,000 End 12,100 End FINANCING: Long-Term Notes Payable 73.000 Beg Common Stock, $l-par 50,000 Beg 102,000 End 55,000 End APIC 52,700 Beg Retained Earnings 38,700 Beg End 26,800 62,700 End 91,300 End