Intermediate Acc I Final Exam 1 Ch23 Statement of Cash Flows

A company acquired a building, paying a portion of the purchase price in cash and issuing a mortgage note payable to the seller for the balance. 111. In a statement of cash flows, what amount is included in investing activities for the above transaction? a. Cash payment b. Acquisition price c. Zero d. Mortgage amount

Ans: A

Jamison Corp.'s balance sheet accounts as of December 31, 2018 and 2017 and information relating to 2018 activities are presented below. December 31, 2018 2017 Assets Cash $ 440,000 $ 200,000 Short-term investments 600,000 — Accounts receivable (net) 1,020,000 1,020,000 Inventory 1,380,000 1,200,000 Long-term investments 400,000 600,000 Plant assets 3,400,000 2,000,000 Accumulated depreciation (900,000) (900,000) Patent 180,000 200,000 Total assets $6,520,000 $4,320,000 Liabilities and Stockholders' Equity Accounts payable and accrued liabilities $1,660,000 $1,440,000 Notes payable (nontrade) 580,000 — Common stock, $10 par 1,600,000 1,400,000 Additional paid-in capital 800,000 500,000 Retained earnings 1,880,000 980,000 Total liabilities and stockholders' equity $6,520,000 $4,320,000 Information relating to 2018 activities: • Net income for 2018 was $1,500,000. • Cash dividends of $600,000 were declared and paid in 2018. • Equipment costing $1,000,000 and having a carrying amount of $320,000 was sold in 2018 for $360,000. • A long-term investment was sold in 2018 for $320,000. There were no other transactions affecting long-term investments in 2018. • 20,000 shares of common stock were issued in 2018 for $25 a share. • Short-term investments consist of treasury bills maturing on 6/30/19. 107. Net cash used in Jamison's 2018 investing activities was a. $2,320,000. b. $1,820,000. c. $1,680,000. d. $1,720,000.

Ans: A

Jamison Corp.'s balance sheet accounts as of December 31, 2018 and 2017 and information relating to 2018 activities are presented below. December 31, 2018 2017 Assets Cash $ 440,000 $ 200,000 Short-term investments 600,000 — Accounts receivable (net) 1,020,000 1,020,000 Inventory 1,380,000 1,200,000 Long-term investments 400,000 600,000 Plant assets 3,400,000 2,000,000 Accumulated depreciation (900,000) (900,000) Patent 180,000 200,000 Total assets $6,520,000 $4,320,000 Liabilities and Stockholders' Equity Accounts payable and accrued liabilities $1,660,000 $1,440,000 Notes payable (nontrade) 580,000 — Common stock, $10 par 1,600,000 1,400,000 Additional paid-in capital 800,000 500,000 Retained earnings 1,880,000 980,000 Total liabilities and stockholders' equity $6,520,000 $4,320,000 Information relating to 2018 activities: • Net income for 2018 was $1,500,000. • Cash dividends of $600,000 were declared and paid in 2018. • Equipment costing $1,000,000 and having a carrying amount of $320,000 was sold in 2018 for $360,000. • A long-term investment was sold in 2018 for $320,000. There were no other transactions affecting long-term investments in 2018. • 20,000 shares of common stock were issued in 2018 for $25 a share. • Short-term investments consist of treasury bills maturing on 6/30/19. 108. Net cash provided by Jamison's 2018 financing activities was a. $480,000. b. $520,000. c. $1,080,000. d. $1,680,000.

Ans: A

Peavy Corp.'s transactions for the year ended December 31, 2018 included the following: • Acquired 50% of Gant Corp.'s common stock for $300,000 cash which was borrowed from a bank. • Issued 5,000 shares of its preferred stock for land having a fair value of $480,000. • Issued 600 of its 11% debenture bonds, due 2023, for $588,000 cash. • Purchased a patent for $330,000 cash. • Paid $180,000 toward a bank loan. • Sold available-for-sale securities for $1,194,000. • Had a net increase in returnable customer deposits (long-term) of $132,000. 115. Peavy's net cash provided by investing activities for 2018 was a. $414,000. b. $564,000. c. $864,000. d. $894,000.

Ans: B

Peavy Corp.'s transactions for the year ended December 31, 2018 included the following: • Acquired 50% of Gant Corp.'s common stock for $300,000 cash which was borrowed from a bank. • Issued 5,000 shares of its preferred stock for land having a fair value of $480,000. • Issued 600 of its 11% debenture bonds, due 2023, for $588,000 cash. • Purchased a patent for $330,000 cash. • Paid $180,000 toward a bank loan. • Sold available-for-sale securities for $1,194,000. • Had a net increase in returnable customer deposits (long-term) of $132,000. 116. Peavy's net cash provided by financing activities for 2015 was a. $708,000. b. $840,000. c. $888,000. d. $1,020,000.

Ans: B

Smiley Corp.'s transactions for the year ended December 31, 2018 included the following: • Purchased real estate for $1,250,000 cash which was borrowed from a bank. • Sold available-for-sale securities for $1,000,000. • Paid dividends of $1,200,000. • Issued 500 shares of common stock for $500,000. • Purchased machinery and equipment for $250,000 cash. • Paid $900,000 toward a bank loan. • Reduced accounts receivable by $200,000. • Increased accounts payable $400,000. 114. Smiley's net cash used in financing activities for 2018 was a. $450,000. b. $350,000. c. $900,000. d. $850,000.

Ans: B

110. Nagel Co.'s prepaid insurance was $190,000 at December 31, 2018 and $90,000 at December 31, 2017. Insurance expense was $62,000 for 2018 and $54,000 for 2017. What amount of cash disbursements for insurance would be reported in Nagel's 2018 net cash provided by operating activities presented on a direct basis? a. $198,000. b. $162,000. c. $128,000. d. $62,000.

Ans: B,

109. Foxx Corp.'s comparative balance sheet at December 31, 2018 and 2017 reported accumulated depreciation balances of $1,245,000 and $900,000, respectively. Property with a cost of $75,000 and a carrying amount of $57,000 was the only property sold in 2018. Depreciation charged to operations in 2018 was a. $327,000. b. $345,000. c. $363,000. d. $402,000.

Ans: C

A company acquired a building, paying a portion of the purchase price in cash and issuing a mortgage note payable to the seller for the balance. 112. In a statement of cash flows, what amount is included in financing activities for the above transaction? a. Cash payment b. Acquisition price c. Zero d. Mortgage amount

Ans: C

Jamison Corp.'s balance sheet accounts as of December 31, 2018 and 2017 and information relating to 2018 activities are presented below. December 31, 2018 2017 Assets Cash $ 440,000 $ 200,000 Short-term investments 600,000 — Accounts receivable (net) 1,020,000 1,020,000 Inventory 1,380,000 1,200,000 Long-term investments 400,000 600,000 Plant assets 3,400,000 2,000,000 Accumulated depreciation (900,000) (900,000) Patent 180,000 200,000 Total assets $6,520,000 $4,320,000 Liabilities and Stockholders' Equity Accounts payable and accrued liabilities $1,660,000 $1,440,000 Notes payable (nontrade) 580,000 — Common stock, $10 par 1,600,000 1,400,000 Additional paid-in capital 800,000 500,000 Retained earnings 1,880,000 980,000 Total liabilities and stockholders' equity $6,520,000 $4,320,000 Information relating to 2018 activities: • Net income for 2018 was $1,500,000. • Cash dividends of $600,000 were declared and paid in 2018. • Equipment costing $1,000,000 and having a carrying amount of $320,000 was sold in 2018 for $360,000. • A long-term investment was sold in 2018 for $320,000. There were no other transactions affecting long-term investments in 2018. • 20,000 shares of common stock were issued in 2018 for $25 a share. • Short-term investments consist of treasury bills maturing on 6/30/19. 106. Net cash provided by Jamison's 2018 operating activities was a. $1,500,000. b. $2,120,000. c. $2,080,000. d. $2,160,000.

Ans: C

Smiley Corp.'s transactions for the year ended December 31, 2018 included the following: • Purchased real estate for $1,250,000 cash which was borrowed from a bank. • Sold available-for-sale securities for $1,000,000. • Paid dividends of $1,200,000. • Issued 500 shares of common stock for $500,000. • Purchased machinery and equipment for $250,000 cash. • Paid $900,000 toward a bank loan. • Reduced accounts receivable by $200,000. • Increased accounts payable $400,000. 113. Smiley's net cash used in investing activities for 2018 was a. $1,500,000. b. $750,000. c. $500,000. d. $250,000.

Ans: C