000 Common Stock Act 3392 Troy University Cash F

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000 Common Stock Act 3392 Troy University Cash F

30. (8 points) Selected information for Evan Company follows:

Balance sheet accounts:05-31-1706-30-17

Cash$270,000$253,000

Accounts receivable425,000500,000

Inventory400,000360,000

Prepaid rent75,00095,000

Accounts payable (for inventory purchases only)130,000155,000

Accrued wages payable63,00047,000

Accrued interest payable7,00015,000

Unearned revenue40,00050,000

Income statement amounts for June 2017:

Sales revenue$980,000

Cost of goods sold312,000

Selling, general, and administrative expenses*410,000

Interest expense30,000

* includes $36,000 of depreciation expense

Evan entered into the following transactions during the month ended 06-30-17:

  • Issued 5,000 shares of stock in exchange for 5 acres of land. Evan is a publicly traded company. At the time of issuance, one share of Evan’s stock had a fair market value of $40.
  • Evan borrowed $150,000.
  • Evan sold a fixed asset for $44,000. At the time of the sale, the fixed asset’s book value was $20,000.

Calculate for following for the month of June 2017:

  • Cash collections from customers
  • Cash payments for inventory
  • Cash payments for selling, general, and administrative expenses
  • Cash payments for interest
  • Cash provided by or used in investing activities.

31. (22 points) G Company’s balance sheets and income statement follow:

12-31-1812-31-19

Cash$850,000$620,000

Short-term accounts receivables from customers, net950,000975,000

Inventory275,000330,000

Investments145,000205,000

Plant assets (including right-of-use assets)2,800,0003,784,000

Accumulated depreciation(1,000,000)(1,300,000)

$4,020,000$4,614,000

Short-term debt559,000294,000

Accounts payable58,70225,000

Income taxes payable102,000120,000

Accrued liabilities215,000335,592

Long-term finance lease obligations177,298556,408

Defined benefit pension plan obligation600,000590,000

Common stock ($1 par value)100,000100,000

Additional paid-in-capital, common stock1,425,0001,425,000

Treasury stock(65,000)(100,000)

Other comprehensive income – Prior Service Cost(15,000)(14,000)

Retained earnings863,0001,282,000

$4,020,000$4,614,000

Sales$12,500,000

Cost of goods sold4,200,000

Operating expenses7,653,000

Pension-related expense100,000

Other income/gains/losses, net134,000

Interest expense15,393

Income before taxes665,607

Income tax expense146,607

Net income$519,000

Additional information for G follows:

  • G is a publicly-traded company.
  • G’s investments account balance includes any necessary fair value adjustment amount.
  • G’s investments account consists of a 40% interest G has in Acme Company’s common stock. G bought the 40% interest on 12-31-18 for $145,000. During 2019, Acme reported $360,000 of net income and declared and distributed cash dividends.
  • G’s plant assets account includes capitalized leased assets. As of 12-31-19, G had the following two leases.
    • On 12-31-19, G leased a machine with a useful life of 4 years. The lease required G to make 4 annual lease payments of $150,000 starting 12-31-19. G’s borrowing rate on 12-31-19 was 3.5%. G treated this lease as a long-term finance lease.
    • On 12-31-17, G leased a machine with a useful life of 5 years. The lease required G to make 5 annual lease payments of $50,000 starting 12-31-18. G’s borrowing rate on 12-31-17 was 5%. G treated this lease as a long-term finance lease.
  • During 2019, G recorded a $10,000 impairment loss on one of its plant assets.
  • On 12-15-19, G bought back some of its outstanding common stock. For 2019, this was G’s only treasury stock transaction.
  • During 2019, G declared and distributed cash dividends on its outstanding common stock.
  • During 2019, G made a cash contribution to its defined-benefit pension plan.
  • On G’s income statement, the “operating expenses” caption includes, but is not limited to, depreciation AND amortization of right-of-use assets AND capitalized lease interest expense; G includes the “interest expense” on any long-term finance leases in its operating expenses, i.e., G’s interest expense reported on its income statement is only on money borrowed.
  • On G’s income statement, the “Other income/gains/losses, net” caption includes, but is not limited to, impairment losses AND investment-related income/losses.
  • G’s accounts payable account is used solely for inventory purchases made on a credit basis.
  • G records adjusting journal entries only once a year as of year-end.
  • G uses the direct method.
  • G separates its receipts into:
    • Receipts from customers
    • Other receipts
  • G separates its payments into:
    • Payments to suppliers for inventory
    • Payments for operating expenses (other than pension plan-related)
    • Payments for (contributions to) its pension plan
    • Payments for interest
    • Payments for income taxes

Prepare a statement of cash flows for G the year ended 12-31-19. Label your section answers as provided by OR used in.

In your footnote reconciliation of net income to cash flows from operating activities, be specific in your reconciling items. Also, be sure to support your reconciling item amounts with journal entries and/or amortization schedules and/or other supporting calculations that you deem appropriate.