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Brief Exercise - Chapter 17 - Solutions

This document provides solutions to 10 brief exercises related to cash flow statements. It addresses cash flows between operating, investing and financing activities, reconciles net income to net cash provided by operating activities through adjustments, and calculates free cash flow in 3 of the exercises. The exercises cover a range of cash flow topics including identifying activity types, preparing partial statements, and performing calculations.

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An Nguyen Thai Hong
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100 views

Brief Exercise - Chapter 17 - Solutions

This document provides solutions to 10 brief exercises related to cash flow statements. It addresses cash flows between operating, investing and financing activities, reconciles net income to net cash provided by operating activities through adjustments, and calculates free cash flow in 3 of the exercises. The exercises cover a range of cash flow topics including identifying activity types, preparing partial statements, and performing calculations.

Uploaded by

An Nguyen Thai Hong
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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SOLUTIONS TO BRIEF EXERCISES

BRIEF EXERCISE 17-1

(a) Cash inflow from financing activity, $200,000.


(b) Cash outflow from investing activity, $150,000.
(c) Cash inflow from investing activity, $20,000.
(d) Cash outflow from financing activity, $50,000.

BRIEF EXERCISE 17-2

(a) Investing activity. (d) Operating activity.


(b) Investing activity. (e) Financing activity.
(c) Financing activity. (f) Financing activity.

BRIEF EXERCISE 17-3

Cash flows from financing activities


Proceeds from issuance of bonds payable.........$300,000
Payment of dividends..............................................(50,000)
Net cash provided by financing activities....$250,000

BRIEF EXERCISE 17-4

Net income...........................................................$2,800,000
Adjustments to reconcile net income
  to net cash provided by operating activities
Depreciation expense.................................. $160,000
Accounts receivable decrease...................  350,000
Accounts payable decrease....................... (280,000) 
230,000
Net cash provided by operating activities $3,030,000
BRIEF EXERCISE 17-5
Cash flows from operating activities
Net income............................................................. $280,000
Adjustments to reconcile net income
  to net cash provided by operating activities
Depreciation expense.................................... $ 70,000
Loss on disposal of plant assets .............. 12,000
. . .82,000
Net cash provided by operating activities...... $362,000

BRIEF EXERCISE 17-6


Net income..................................................................... $300,000
Adjustments to reconcile net income to net
  cash provided by operating activities
Decrease in accounts receivable......................... $ 80,000)
Increase in inventory............................................. (30,000)
Increase in prepaid expenses.............................. (28,000)  
22,000
Net cash provided by operating activities $322,000

BRIEF EXERCISE 17-7


Original cost of equipment sold.................................. $22,000
Less: Accumulated depreciation................................    5,500
Book value of equipment sold.....................................  16,500
Less: Loss on disposal of equipment........................    6,500
Cash received from sale of equipment....................... $10,000

BRIEF EXERCISE 17-8


Free cash flow = $155,793,000 – $132,280,000 – $5,000,000 =
$18,513,000

BRIEF EXERCISE 17-9


Free cash flow = $360,000 – $200,000 – $140,000 = $20,000

BRIEF EXERCISE 17-10


Free cash flow = $45,600,000 – $1,600,000 – $0 = $44,000,000

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