$ 180,000
(415,000)
(59,000)
$(294,000)
$ 250,000
510,000
(350,000)
(46,000)
$ 364,000
SOLUTIONS TO EXERCISES
EXERCISE 23-1 (1015 minutes)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
23-1
(l)
Investing activity.
23-2
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
(b)
(c)
$862,000 (a)
$609,000 (b)
44,500 (c)
653,500
$208,500
$840,000
22,000
$862,000
$624,000
15,000
$609,000
$ 40,000
4,500
$ 44,500
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
23-3
$90,000
$60,000
26,000
22,000
15,000
(4,500)
118,500
$208,500
Dividends declared
Retained Earnings
91,000
?
31,000
104,000
12/31/11
Net income
12/31/12
23-4
Dividends Payable
5,000
18,000
?
8,000
12/31/11
Dividends declared
12/31/12
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
Redemption of B/P
Bonds Payable
46,000
25,000
?
49,000
12/31/11
Issuance of B/P for PP&E
12/31/12
$ 810
$ 30
(80)
300
400
(450)
(50)
150
960
23-5
250
(130)
120
130
(250)
(260)
(380)
700
1,100
$1,800
70
70
23-6
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
$27,000
$31,000*
4,000
(2,000)
20,000
4,000
4,000
(1,000)
(13,000)
(2,000)
11,000
(54,000)
(17,000)
(60,000)
(2,000)
(7,000)
(6,000)
(15,000)
45,000
72,000
(3,000)
9,000
$ 6,000
$11,400
$ 8,750**
23-7
$ 46,000*
$ 28,000
9,000
4,000
(27,000)
18,000
32,000
78,000
8,000
34,000
(180,000)**
(138,000)
75,000
(10,000)
65,000
5,000
10,000
$ 15,000
23-8
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
SOLUTIONS TO PROBLEMS
PROBLEM 23-1
SULLIVAN CORP.
Statement of Cash Flows
For the Year Ended December 31, 2012
Cash flows from operating activities
Net income.....................................................
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation...........................................
Gain on sale of equipment...................
Equity in earnings of Myers Co...........
Decrease in accounts receivable.........
Increase in inventories.........................
Increase in accounts payable..............
Decrease in income taxes payable......
Net cash provided by operating
activities.....................................................
Cash flows from investing activities:
Proceeds from sale of equipment...............
Loan to TLC Co..............................................
Principal payment of loan receivable..........
Net cash used by investing
activities.....................................
Cash flows from financing activities:
Dividends paid...............................................
Net cash used by financing
activities.....................................
Net increase in cash...............................................
Cash, January 1, 2012............................................
Cash, December 31, 2012......................................
$370,000
$147,000 (a)
(2,000) (b)
(35,000) (c)
40,000
(135,000)
60,000
(20,000)
55,000
425,000
40,000
(300,000)
50,000
(210,000)
(100,000)
(100,000)
115,000
700,000
$815,000
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
23-9
$400,000
Explanation of Amounts
(a) Depreciation
Net increase in accumulated
depreciation for the year ended
December 31, 2012..................................
Accumulated depreciation on equipment sold:
Cost................................................................
Carrying value...............................................
Depreciation for 2012............................................
$125,000
$60,000
38,000
22,000
$147,000
$ 40,000
(38,000)
$ 2,000
$140,000
X 25%
$ 35,000
23-10
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
PROBLEM 23-2
HINCKLEY CORPORATION
Statement of Cash Flows
For the Year Ended December 31, 2012
Cash flows from operating activities
Net income.......................................................
Adjustments to reconcile net income
to net cash provided by operating
activities:
Loss on sale of equipment.....................
Gain from flood damage.........................
Depreciation expense.............................
Patent amortization.................................
Gain on sale of investments...................
Increase in accounts receivable (net)...
Increase in inventory..............................
Increase in accounts payable................
Net cash provided by operating activities....
Cash flows from investing activities
Sale of investments.........................................
Sale of equipment............................................
Purchase of equipment...................................
Proceeds from flood damage to building.....
Net cash provided by investing activities.....
Cash flows from financing activities
Payment of dividends.....................................
Payment of short-term note payable.............
Net cash used by financing activities...........
Increase in cash.......................................................
Cash, January 1, 2012.............................................
Cash, December 31, 2012.......................................
$14,750 (a)
$ 4,100 (b)
(8,250)*
1,900 (c)
1,250
(1,700)
(3,750)**
(3,000)
2,000
(7,450)
7,300
4,700
2,500
(20,000)(d)
32,000
19,200
(5,000)
(1,000)
(6,000)
20,500
13,000
$33,500
23-11
$2,000
$6,500
$10,000
16,000
$26,000
Supporting Computations:
(a) Ending retained earnings......................................
Beginning retained earnings.................................
Net income..............................................................
$20,750
(6,000)
$14,750
(b) Cost..........................................................................
$11,000
(4,400)
$ 6,600
(2,500)
$ 4,100
$ 4,400
(2,500)
$ 1,900
$20,000
(11,000)
9,000
16,000
25,000
(45,000)
$20,000
23-12
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
PROBLEM 23-3
MORTONSON COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2012
($000 Omitted)
Cash flows from operating activities
Cash receipts from customers.......................
Cash payments:
Payments for merchandise........................ $1,270 (b)
Salaries and benefits..................................
725
Heat, light, and power.................................
75
Property taxes.............................................
19
Interest..........................................................
30
Miscellaneous..............................................
10
Income taxes................................................
808 (c)
Net cash provided by operating activities.....
Cash flows from investing activities
Sale of available-for-sale investments...........
Purchase of buildings and equipment...........
Purchase of land..............................................
Net cash used by investing activities............
Sales..................................................................
Deduct ending accounts receivable..............
Add beginning accounts receivable..............
Cash receipts (collections from
customers)............................................
2,937
583
40
(310)
(80)
(350)
Increase in cash........................................................
Cash, January 1, 2012..............................................
Cash, December 31, 2012.........................................
(a)
$3,520 (a)
233
100
$ 333
$3,800
(780)
3,020
500
$3,520
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)
23-13
$1,200
720
1,920
(560)
1,360
(420)
940
330
$1,270
$818
(40)
778
30
$ 808
23-14
Copyright 2011 John Wiley & Sons, Inc.Kieso, Intermediate Accounting, 14/e, Solutions Manual (For Instructor Use Only)