Financial Accounting Midterm

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1. Payments to acquire investment in debt securities
2. Dividends received on investments made in the stock of other corporations 3. Payments for the acquisition of inventory
4. Proceeds from issuance of stock
5. Payments for interest on loans
6. Interest received on loans made to outside entities
7. Repayment of the principal on loans
8. Payment to acquire productive assets
9. Proceeds from the sale of productive assets
10. Cash receipts from the sale of services
11. Payments of dividends to stockholders
12. Payments to suppliers and for other expenses

On the basis of the following data for Cole Co. for the current year and the preceding year ended Dec.31,20--,prepare a statement of cash flow. Use the indirect method of reporting cash flows from operation activities. Assume that equipment costing $100,000 was purchased for each and equipment costing $60,000 with accumulated depreciation of $40,000 was sold for $15,000; that the stock was issued for cash; and the only entries in the retained earnings account were net income of $49,000 and cash dividends declared $11,000. Current Preceding Cash 100,000 78,000

Accounts receivable(net) 78,000 85,000 Inventories 101,500 90,000 Equipment 410,000 370,000 Accumulated depreciation (150,000) (158,000) 539,500 465,000

Accounts payable 58,500 55,000 Cash dividends payable 5,000 4,000 Common stock $10 par 200,000 170,000 Paid-in capital in excess of par—

Common stock 62,000 60,000
Retained earnings 214,000 176,000 539,500 465,000


On the basis of the following data for Cole Co. for the current year and the preceding year ended Dec.31,20--,prepare a statement of cash flow. Use the indirect method of reporting cash flows from operation activities. Assume that equipment costing $100,000 was purchased for each and equipment costing $60,000 with accumulated depreciation of $40,000 was sold for $15,000; that the stock was issued for cash; and the only entries in the retained earnings account were net income of $49,000 and cash dividends declared $11,000. Current Preceding Cash 100,000 78,000

Accounts receivable(net) 78,000 85,000 Inventories 101,500 90,000 Equipment 410,000 370,000 Accumulated depreciation (150,000) (158,000) 539,500 465,000

Accounts payable 58,500 55,000 Cash dividends payable 5,000 4,000 Common stock $10 par 200,000 170,000 Paid-in capital in excess of par—

Common stock 62,000 60,000
Retained earnings 214,000 176,000 539,500 465,000

Outflow(-) I

+ O

* O
+ F
* O
+ O

* F
* I
+ I
+ O
* F
* O

EXAM 2
1. When good s are shipped FOB shipping point, title passes to the buyer on the shipment date. True 2. When goods are shipped FOB destination, the revenue from the sale is recognized on the shipment date. False 3. Sales returns and allowances is a contra-revenue(debit) account. True 4. Credit terms of “2/10,n/30” mean that if payment is made in 2 days, a 10% discount will be given; if not paid within 2 days, the full invoice price will be due in thirty days. FALSE...
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