Problem 11

11 ARDUOUS COMPANY
Statement of Cash Flows
for the Year Ended December 31, 2023
($ in millions)

Cash flows from operating activities:

Cash inflows:
From customers $414
From gain on sale of cash equivalent 2
Cash outflows
To suppliers of goods (200)
To employees (78)
For insurance expense (3)
For income taxes (35)
Net cash flows from operating activities $ 100

Cash flows from investing activities:

Interest revenue received 3
Sale of equipment 17
 Purchase of long-term investment (25)
Purchase of Land (23)
Net cash flows from investing activities (28)

Cash flows from financing activities:

Payment on lease liability (7)
For bond interest expense (21)
Retirement of bonds payable (60)
Issuance of preference shares 75
Payment of cash dividends (22)
Purchase of treasury shares (9)
Net cash flows from financing activities (44)

Net increase in cash 28

Cash balance, January 1 81

Cash balance, December 31 $ 109

Noncash investing and financing activities:

Acquired $82 million worth of right to use building by fifteen-year lease.

Acquired $46 million of land by paying cash and issuing a note as follows:
Cost of equipment $40
Cash paid (23)
Note issued $23

Problem 12
12 (Req 1)
Retirement of common shares
Ordinary Share Capital 5
Share Premium 15
Retained Earnings 2
Cash 22
Net income closed to retained earnings
Net Profit/
Income Summary 88
Retained Earnings 88
Declaration of a cash dividend
Retained Earnings 33
Cash 33
1 for 25 bonus issue
Retained Earnings 4
Ordinary Share Capital 4

12(Req2) BANNER-JUDE CORPORATION

Statement of Retained Earnings
for Year Ended December 31, 2023 ($ in millions)

Balance at January 1 $ 90
Net Income for the Year 88
Deductions:
Retirement of common stock ( 2)
Cash dividends of $.33 per share ( 33)
1 for 25 stock dividend ( 4)
Balance at December 31 $ 139

Problem 13

Amount Category
1. Cash collections from customers (direct method). $145,000 O
2. Payments for purchase of property, plant, and
equipment. $ 50,000 I
3. Proceeds from sale of equipment. $ 31,000 I
4. Cash dividends paid. $ 12,000 F
5. Redemption of bonds payable. $ 17,000 F

Accounts Receivable /Sales

___________________________________________________________

Beginning balance 24
Sales 155

145Cash received

____________

Ending balance 34

2Property, Plant, & Equipment

___________________________________________________________

Beginning balance 247

Acquired with B/P 20

40Equipment sold

Purchased 50

____________

Ending balance 277

Accumulated Depreciation

___________________________________________________________

167Beginning balance

33Depreciation expense

Equipment sold 22

____________

178Ending balance
 Cash 31,000

Accumulated depreciation 22,000

PPE 40,000

Gain on sale of equipment 13,000

Retained Earnings

___________________________________________________________

91Beginning balance

28Net income

Dividends declared 15

____________

104Ending balance

Retained earnings 15,000

Dividends payable 3,000

Cash 12,000

Bonds Payable

___________________________________________________________

46Beginning balance

20Issued for PP

Bonds redeemed 17

____________

49Ending balance
 Problem 14

14(Req 1) DIVERSIFIED PORTFOLIO CORPORATION

for the Year Ended December 31, 2023
($ in thousands)

Cash flows from operating activities:

Cash inflows:
From customers $880
Cash outflows
For operating expense (660)
For income taxes (45)
Net cash flows from operating activities $ 175

Cash flows from investing activities:

Sale of long-term investment 50
Net cash flows from investing activities 50

Cash flows from financing activities:

Issuance of preference shares 100
Payment of cash dividends (80)
Net cash flows from financing activities 20

Net increase in cash 245

Cash balance, January 1 70

Cash balance, December 31 $ 315
14(Req 2) DIVERSIFIED PORTFOLIO CORPORATION
INDIRECT METHOD

Cash flows from operating activities:

Net income $160,000
Adjustments for noncash effects:
Depreciation expense 30,000
Changes in operating assets and liabilities:
Increase in accounts receivable (20,000)
Increase in accounts payable 10,000
Decrease in income taxes payable (5,000)
Net cash flows from operating activities $175,000

Problem 15

15(Req1)
RANDVIEW CORPORATION
Statement of Financial Position
At December 31
2018 2017
Assets:
Cash $145 $ 59
Accounts receivable 93 84
Investments - 50
Inventory 60 52
Property, plant & equipment 150 150
Less: Accumulated depreciation (65) (55)
Total assets 383 340
Liabilities and Shareholders' Equity:
Accounts payable to suppliers $ 40 $ 30
Payables for selling and admin. expenses 9 9
Income taxes payable 22 24
Ordinary Share Capital 240 230
Retained earnings 72 33
Total liabilities and shareholders' equity 383 340

Accounts Receivable /Sales

___________________________________________________________
Beginning balance 84

Sales 80

71Cash received

____________

Ending balance 93

Inventory

___________________________________________________________

Beginning balance 52

Purchased Inventory 40

32COGS

____________

Ending balance 60

Accounts Payable

___________________________________________________________

30Beginning balance

40Purchased Inventory

Payment to suppliers 30

____________

40Ending balance

Accumulated Depreciation

___________________________________________________________
 155Beginning balance

10Depreciation Expense

____________

165Ending balance

Income Tax Payable

___________________________________________________________

24Beginning balance

7 Income tax Expense

Payment of Tax 9

____________

22Ending balance

Retained Earnings

___________________________________________________________

47Beginning balance

28 Net Profit

Payment of Cash Dividends 3

____________

72Ending balance
 5(Req2) RANDVIEW CORPORATION
INDIRECT METHOD

Cash flows from operating activities:

Net income $28
Adjustments for noncash effects:
Depreciation expense 10
Gain on sale of Investment (15)
Changes in operating assets and liabilities:
Increase in accounts receivable (9)
Increase in Inventory (8)
Increase in accounts payable 10
Decrease in income taxes payable (2)
Net cash flows from operating activities $14