Acc 557 week 9 chapter 13 homework 5

1. ACC 557 Week 9 Chapter 13 Homework 5
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Due Week 9 and worth 50 points
Directions: Answer the following questions on a separate Microsoft Word or Excel document.
Explain how you reached the answer or show your work if a mathematical calculation is needed,
or both. Submit your assignment using the assignment link in Blackboard.
Exercises
E13-3. Cushenberry Corporation had the following transactions.
 Sold land (cost $12,000) for $15,000.
 Issued common stock at par for $20,000.
 Recorded depreciation on buildings for $17,000.
 Paid salaries of $9,000.
 Issued 1,000 shares of $1 par value common stock for equipment worth $8,000.
 Sold equipment (cost $10,000, accumulated depreciation $7,000) for $1,200.
Instructions
For each transaction above, (a) prepare the journal entry, and (b) indicate how it would affect the
statement of cash flows using the indirect method.
E13-4. Gutierrez Company reported net income of $225,000 for 2015. Gutierrez also reported
depreciation expense of $45,000 and a loss of $5,000 on the disposal of equipment. The
comparative balance sheet shows a decrease in accounts receivable of $15,000 for the year, a
$17,000 increase in accounts payable, and a $4,000 decrease in prepaid expenses.
Instructions
Prepare the operating activities section of the statement of cash flows for 2015. Use the indirect
method.
Problems

2. P13-3A. The income statement of Whitlock Company is presented here.
*PLEASE REFER TO ATTACHMENT FOR ADDITIONAL INFORMATION**
Additional information:
 Accounts receivable increased $200,000 during the year, and inventory decreased
$500,000.
 Prepaid expenses increased $150,000 during the year.
 Accounts payable to suppliers of merchandise decreased $340,000 during the year.
 Accrued expenses payable decreased $100,000 during the year.
 Operating expenses include depreciation expense of $70,000.
Instructions
Prepare the operating activities section of the statement of cash flows for the year ended
November 30, 2015, for Whitlock Company, using the indirect method.
P13-7A. Presented below are the financial statements of Nosker Company.
*PLEASE REFER TO ATTACHMENT FOR ADDITIONAL INFORMATION**
Additional data:
 Dividends declared and paid were $20,000.
 During the year equipment was sold for $8,500 cash. This equipment cost $18,000
originally and had a book value of $8,500 at the time of sale.
 All depreciation expense, $14,500, is in the operating expenses.
 All sales and purchases are on account.
Instructions
 Prepare a statement of cash flows using the indirect method.
 Compute free cash flow.