1. (Worksheet Preparation or indirect Statement of Cash Flows) Below is the comparative balance sheet for ABC Industries.

Dec. 31, Dec. 31,

2012 2011

Cash $ 9,500 $ 11,000

Short-term investments 35,000 50,000

Accounts receivable 71,000 80,000

Allowance for doubtful accounts (4,000) (5,000)

Inventories 61,800 41,000

Prepaid insurance 0 2,000

Land 40,000 20,000

Buildings 140,000 140,000

Accumulated depreciationbuildings (20,000) (15,000)

Equipment 63,000 35,000

Accumulated depreciationequipment (23,000) (11,100)

Trademarks 25,000 0

$398,300 $347,900

Dec. 31, Dec. 31,

2012 2011

Accounts payable $ 46,500 $ 36,000

Short-term notes payable 15,000 10,000

Accrued payables 5,000 10,000

Mortgage payable 65,000 70,000

Capital stock 63,000 58,000

Additional paid-in capital 156,000 134,000

Retained earnings 47,800 29,900

$398,300 $347,900

Dividends in the amount of $30,000 were declared and paid in 2012.

Instructions

Instructions From this information, prepare a worksheet for a statement of cash flows. Make reasonable assumptions as appropriate. The short-term investments are considered available-for-sale, and no unrealized gains or losses have occurred on these securities.

2. (Basic Pension Worksheet) The following facts apply to the pension plan of I-Pass Corporation for the year 2012.

Plan assets, January 1, 2012 $950,000

Projected benefit obligation, January 1, 2012 950,000

Settlement rate 6% Service cost 75,000

Contributions (funding) 10,000

Actual and expected return on plan assets 40,600

Benefits paid to retirees 42,200

Instructions Using the preceding data, compute pension expense for the year 2012. As part of your solution, prepare a pension worksheet that shows the journal entry for pension expense for 2012 and the year-end balances in the related pension accounts.