1nilB CHAPfER 12HOI\4EWORK @l CHAPTER T2 HOMEWORK B. Prablem 12-lA Statenent of cash flows (indirect method) L.O. 41 . Pl. P2, P3 Kazaam Company, a marchandiser, recenty comdeled its calendar-year2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receisbla roftect cash receipts f,om custonrers, (3) all prrchases of in\entory ara on cr€dit, (4) all debits to AccorJnts Payable relect cash payments for in/entory, and (5) Other Expensas are paid in adwrne and are initially dabitad to Pnpaid Exponser. The company's balance sheets ard income stat€ment blb\,- KAZAAM COMPAI,IY Comparatir,e B alarrco Sheets December 31, 2011 and 2010 2011 2010 $ 49,800 S 73,500 65,880 57,000 277,AOO 251,000 1,250 1,800 158,500 106,500 (35,875) (46,000) s 516,555 $443,800 $ 82,80s S 115,000 11,000 7,000 60,000 48,750 157,500 149,000 25,500 0 179,750 124,050 $ 516,555 $443,800 KAZAAM COMPANY hcome Statem€nt For Year Ended D€comber 31, 201 1 As3els Cash Accounts recei\EHe Marchandise insntory Prepaid expenses Equipment Accurn- depreciatN quipi"n€nt Total asssls LiabilitieBend Equity Accounts payabb Short-term notes payable Lorp-term notes payable C,ommon stock, $5 par raalue Paid-in capital in excess ofpar, cornmon stock R€tain€d eamings Total liabilities and Gquity Sales Cost of goods sold Gross profit Operating exp€nses Depreciatbn exp€nse Other expnses Other gains (losses) Loss on sale of€quipmant tr|come bebfe taxes tlcome taxes expanse Itlet incorns s 583,000 286,000 297,000 $ 20,000 134,000 154,0m 137,500 25,500 5,500 $ 1 12,000 l- _ __._, , -----,.__.- * - ,__., .-._-::::-:a Addllional hformafon on Yegr 2A11 Tnnsctions a. The loss on the cash sal€ of equiprylent was $5,50O (details in b). b, Sold equiprnent costing $47,250, with accumulated depreciation of$30,125, for 911,625 cash. c. Purchasod equipment costing $99,250 by paying $25,[email protected] cash and signing a long.term note payable br the balance- d. Borroued $4,000 cash by silnirE a short-t€rm note payabl€. e. Paid $63,@0 cesh to reducethe longiterm notes payabks. f. lssued 1,700 shar6 of cornmon stock br $20 cash per share. g. Daclarcd and paid cash dillderfrs of $ffi,300. Required: 1. Prcpare a compl€te statefitsnt of cash florvs; repon [s op€rating actirities using the indirect meth(/,. (Amounb to be deducted should be indicated with a minus sign. Omit the "3" sign in your response.) KAZAAM COMPANY Statement of Cash Flom 1t2 1nu13 CHAPTER 12HOMEWCIRK For Year Ended December 31, 201 1 fana- frs Cash forvs fiom operating actirities itbtincdns, '...,.., .,.. i .,, , 1v Adiustments to reconcile net income to net rua "on llGE-l]]]lil incstins activties Cash f,orls ftom fnancino actirities Cashbaid dl nde: .lw Ca*h'fioriorivedottshrt4eifi rde : r ..'ly C'6h frorni63drEstsf. , .l' Cash paid br d$d€rds tl.t ""sn li's-JElllTll l fnancins actirities Cash balance at beginning of2011 Cash balance at end of 201 1 $: _J.

1. 1nilB CHAPfER 12HOI4EWORK
@l
CHAPTER T2 HOMEWORK
B.
Prablem 12-lA Statenent of cash flows (indirect method) L.O.
41 . Pl. P2, P3
Kazaam Company, a marchandiser, recenty comdeled its
calendar-year2011 operations. For the year, (1)
all sales are credit sales, (2) all credits to Accounts Receisbla
roftect cash receipts f,om custonrers, (3) all
prrchases of inentory ara on cr€dit, (4) all debits to AccorJnts
Payable relect cash payments for in/entory,
and (5) Other Expensas are paid in adwrne and are initially
dabitad to Pnpaid Exponser. The company's
balance sheets ard income stat€ment blb,-
KAZAAM COMPAI,IY
Comparatir,e B alarrco Sheets
December 31, 2011 and 2010
2011 2010
$ 49,800 S 73,500
65,880 57,000
277,AOO 251,000
1,250 1,800

2. 158,500 106,500
(35,875) (46,000)
s 516,555 $443,800
$ 82,80s S 115,000
11,000 7,000
60,000 48,750
157,500 149,000
25,500 0
179,750 124,050
$ 516,555 $443,800
KAZAAM COMPANY
hcome Statem€nt
For Year Ended D€comber 31, 201 1
As3els
Cash
Accounts receiEHe
Marchandise insntory
Prepaid expenses
Equipment
Accurn- depreciatN quipi"n€nt
Total asssls
LiabilitieBend Equity
Accounts payabb
Short-term notes payable
Lorp-term notes payable
C,ommon stock, $5 par raalue

3. Paid-in capital in excess ofpar, cornmon stock
R€tain€d eamings
Total liabilities and Gquity
Sales
Cost of goods sold
Gross profit
Operating exp€nses
Depreciatbn exp€nse
Other expnses
Other gains (losses)
Loss on sale of€quipmant
tr|come bebfe taxes
tlcome taxes expanse
Itlet incorns
s 583,000
286,000
297,000
$ 20,000
134,000 154,0m
137,500
25,500
5,500
$ 1 12,000

4. l- _ __._, , -----,.__.- * - ,__., .-._-::::-:a
Addllional hformafon on Yegr 2A11 Tnnsctions
a. The loss on the cash sal€ of equiprylent was $5,50O (details
in b).
b, Sold equiprnent costing $47,250, with accumulated
depreciation of$30,125, for 911,625 cash.
c. Purchasod equipment costing $99,250 by paying
$25,[email protected] cash and signing a long.term note payable
br
the balance-
d. Borroued $4,000 cash by silnirE a short-t€rm note payabl€.
e. Paid $63,@0 cesh to reducethe longiterm notes payabks.
f. lssued 1,700 shar6 of cornmon stock br $20 cash per share.
g. Daclarcd and paid cash dillderfrs of $ffi,300.
Required:
1. Prcpare a compl€te statefitsnt of cash florvs; repon [s
op€rating actirities using the indirect meth(/,.
(Amounb to be deducted should be indicated with a minus sign.
Omit the "3" sign in your
response.)
KAZAAM COMPANY
Statement of Cash Flom
1t2
1nu13 CHAPTER 12HOMEWCIRK
For Year Ended December 31, 201 1

5. fana- frs
Cash forvs fiom operating actirities
itbtincdns, '...,.., .,.. i .,, , 1v
Adiustments to reconcile net income to net
rua
"on llGE-l]]]lil incstins activties
Cash f,orls ftom fnancino actirities
Cashbaid dl nde: .lw
Ca*h'fioriorivedottshrt4eifi rde : r ..'ly
C'6h frorni63drEstsf. , .l'
Cash paid br d$d€rds
tl.t
""sn
li's-JElllTll l fnancins actirities
Cash balance at beginning of2011
Cash balance at end of 201 1
$: _J12,([0
:*-,--;ri.g:
;.. ''.''..,...'.]
----:*2..5r.9-P.': 11,625'
-ii.szs j
. 63,000r
r-*---.:*19-Q

6. : " -..4:-s4-:
: -56,300,
:q1 !3tlo
i,::: ':-:,a'::,':
check nv w ork eBmk Lhks (4 1
@071 fhe UcGnw+ltl, Cmpatries. Atl rtght6 rserved.
tt"t c*tn [[email protected]@Jl]l operatins actiities
Cash llols fiom inestino actilities
ezto.nledo.d.nrcg raurff ll.carv?rntpx 22
1/24113 CHAPTER l2HOMEWORK
@l
CHAPTER 12 HOMEWORK
9.
Problem 12-iM Cash flor,ts spreadsheet (indirect method) L.O"
Pl. P2, P3, P4
Kazaam Company, a merchandber, recendy con$eted its
calsndar-year 201 1 operations. For the year, (1)
all sabs ere cr€dit sal€s, (2) all credits to Accounts Receirable
refect cash receipts forn custorners, (3) all
purchases of inentory are m credit, (4) all detits to Acco$ts
Payable reloct cash payments for in€ntory,
ard (5) Othu Expenses are paid in advance and ar6 inilially
dobited to Prepakl Expanses. Tln company's

7. balance sheeG and incorne statemont fdlcv.
KAZAAM COMPAI'IY
Conparatiw B alance Sheets
Decflnber 31, 201 1 ard 2010
2011 2010
$ 49,800 $ 73,000
65.860 54,000
277,fi0 25affi
1,000 1,800
157,500 106,500
(41,7501 (52,000)
$ 509,910 S435,800
$ 66,485 S 114,000
9,000 7,000
62,500 49,0m
162,250 150,500
35,250 0
174.425 115.300
$ 509,910 $435,800
Asti
C€sh
Accounts receigble
M€rchandise im€ntory
Prepaid expenses
Equipment

8. Accum. depreciatbn-Equipmgnt
Total assets
Liabililiesand Equity
Accounts payabl€
Short-t€rm mt6s payable
Long-term notes payable
Common stock, $5 par mlue
Pakt-in capitel in excess of par, common stock
Ratairred eamings
Total liabilities and equity
KAZAAM COMPANY
hcome Stat8ment
For Year Ended Decemb€r 31, 201 1
Sales
Cost ofgoods sold
Gross profrt
Operating expenses
Depreciation expenso
Oth€r exp6nses
Other gains (bsses)
Lo6s on sale ofequipment
hcome behre taxas
hcome taxes expense
l.lat incoma
$ 5f):],000

9. 289,000
294,000
$ 20,000
133,200 153,200
135,675
24,2fi
5,125
s 111,425
Addifonat htormation on Yep'r 2071 frrnsrctr-ons
a, The loss on the cash sale ofequipmGnt was $5,125 (d€tails in
b).
b. Sdd equipment coEtir€ $46,875, with accumubted dep€chtkrn
of $3O,250, br $11,500 cash.
c, Purchased equiprnent costing $97,875 by payirE $30,000 cash
and signing a lorg.term nota payable br
ths balance-
d. Bono ted $2,000 cash by signing a short-term note payable.
e. Paid $t4,375 cash !o roduce the kmg-t6rm notes payable.
f. lssusd 2,350 shares of common stock ftrr $20 cash per shar€.
g. Declarad and paid cash dividends of SSa3O0,
Required:
Pepare a cornplate statem€nt of cash fforrrs using a speadsheel
report its operating actirities using the
indirect melhod. (Leave no cells blank - be certain to enter "0"
wherever required. Omit the "S"
sign in your rasponse.)
a. Net income w6s $111,425.

10. b, Accounts receinble incrcased.
1t2
1DU13 CHAPTER 12HOMEA,oRK
c. Merchardise inr,wrtory increased.
d. Prapaid expenses decreased.
e. Accounls payaHe decreased.
f. Depreciation expense ,Es $20,000.
g, Sold equiprnent costing $46,875, with accumulated
depreciation of $30,250, for $11,5m cash. ThiE
yielded a loss of$5,125.
h. Purchased equiprnent costing $97,875 by paying
930,[email protected] cash and (i.) by signing a longFtem note
paydle for the balance.
j. Boncnaed $2,000 cash by signing a short+erm note payaH€.
k. Paid $54,375 cash to rcduce the longrterm notes payaHe.
l. lssued 2,350 shares of common stock br $20 cash per share.
m. Declared and paid cash dMdends of $52,3)0.
KqZqAM COMPAT.IY
Spreadsheet br Statement d Cash Floirc
For Year Ended December 31, 201 I
AnalYsis of Charg,es
December December
3'1,2O1O Dettt Gedit 31,2011
Balance sheet--debit bal. accounts
Cash$$$$

11. Accounts receirable
Merchandise inrentory
Prepaid expenses
Eguignent
Balance sheet---credit bal. accounts
Accum. depreciatiorF-Equip.
Accounts payable
Shofierm notes payable
Long-tem notes payaHe
Cornmon stock, $5 par wlue
Paidjn capital in excess sf
par ralu€, common stock
Retained eamings
Statement of cash forvs
Operating actiities
Net income
lncrease in accts. receirble
lncrease in merch. in€ntory
Decrease in prepaid expenses
Decrease in accornts payaHe
Depreciation expense

12. Loss on sale ofequipment
lnesting activties
Receipt frorn sale of equipment
Payment to purchase equipment
Financing actiities
Bonorved on short-term note
Payment on long4erm note
lssued common stock for cash
Payments of cash difdends
Noncash inesting and financing actiities
Purchase of equip- linanced
by longFterm note payaHe
. $r
rc
checkruwork eBooklhks a4l refsences
fr,y A.- tF?
@01'l lhe ilccraw+lill Cmpanles. All rlghb reseryed,
2t2
1D4t13 CHAPTER 12HOi/EWORK
@l

13. CHAPTER 12 HOiIEVIORK
10.
Problent 12-4A Statement of cash flovvs (indirect method) L.O.
P1 . P2. P3
Galley Corp., s merchandiser, recently completedits
2011opsrations. Forthe year, (1) all sales arecredit
sales, (2) all crEdits to Accounts Receiiable refect cash receipts
from customers, (3) all pumhases of
in€ntory are on credit, (4) all debits to Accounts Payable eflect
cash payments for inrentory, (5) Other
Expenses ara all cash exp€nses, and (6) any chango in lnconre
Taxes Payable rellects the accrual and
cash payment oftaxes. Th€ company's balance sheets and
income staternent bllo,v-
GALLEY CORPORATON
Comparatiw Balance Sheets
December 31, 2011 and 2010
2011 2010
s 169,000 s 131,000
83,000 73,000
610.000 515,000
325,000 296,000
(160,000) (103,000)
s 1,027,000 s 912,000
s 117,000 s 120.000
28,000 25,000
592,000 566,000

14. 203,000 164,000
87,000 37,000
s1.027.000 s 912.000
GALLEY CORPORATION
lncome Statement
For Year Ended December 31, 2011
Assets
Cash
Accounts recei6ble
Merchandise inrnntory
Equipment
Accum - depreciation-Equipment
Total assets
Liabiliti€s and Equity
Accounts payable
hcometaxes payable
Comrnon stock, $2 par r€lue
Paid.in capital in excess of par ralue, common stock
Retained eamings
Total liabilities and equity
Sales
Cost ofgoods sold
Gross prolit
Operating expenses
Depreciation expense
Other expenses

15. hcome befrre taxes
hcometaxes expense
l.let income 5 135.000
;;; :i.:i,ll:':=:;::t:;*';';:;t=:.:a=*.,=r===#ffi
Additonal hformalion on Year 2071 ftensact'ons
a. Purchased equipment for 529,000 cash.
b. lssued 13,000 shaEs ofcommon stock br $5 cash per share.
c. Declared and paid S85,00O in cash dividends.
Required:
Prepare a complete statement of cash flows; rcport its cash
inllors and cash outflotrs from operating
actiilties accoding to the ,;1direcl m6thod. (Amounts to be
deducted should be indicat€d with a minus
sign. Omit lhe "S" dgn in your rosponse.)
GALLEY CORPORATION
Statement of Cash Florvs
For Year Ended December 31, 201 1
s 1,798,000
1,087,000
71 1,000
$ 57,000
498,000 555,000
156,000
21,000
Cash iorirrs from operating actiUties

16. l.let income i- s 135.000
57,000
0
Adiustinents to reconcile n€t income to net
cash provided bv oDeralinq actMties:
1t2
fif ,) - r- /,()
N"t cash [@6]ll!l operatir€ actiities
Cash flols from in€sting actiities
khruddtu
CHAPTER 12 HOMEA/ORK
j 0i
{5,000i
,. 6,5r0(n
1/24t13
t'let casn lffiEl]lT fi nancins actirities
Netinflgeeini'€rs6 ..' '.. ,.. , , ' -', l-
Cash balance at beginning of 201 1
Cash balance at end of201'l

17. $:
chskwwtrk e8ookLhl(s (31
---'-l
refsences
@01t The ilcoraw+lill Companics. Atl rlghb rcceflcd.
Cash flo^,s ftom fnancino actiities
ezto.nfndold.nrgrarrtill.cqry'trntp?_=0.0378716206662192
13s9090667559
1n4B CHAPTER 12HOIiIEWORK
CHAPTER 12 HOMEWORK
11.
Problem 12-644 Cash florls spreadsheet (indirect nrthod) L.O.
Pl. P2, P3, P4
Galley Corp-, a merchandiser, recently completed its 2011
operations. For the year, (1) all sales arc credit
sales. 12) all credits to Accounts Receivabb retect cash receiDts
flom custorn€rs, (3) all purchases of
@l nent$ for inlentory, (5) Other'abb retects the accrual and
cash c€lyment of taxes. The cornpany's balance sheets and
incorne staternent blbu,.
GALLEY CORPORATION
Cornparath,€ Balance S heets

18. Decemb€r 31, 201 1 and 2010
2011 2010
$ 188,120 $ 127,512
95,644 88,044
670,112 582,912
416,852 324,852
(168,120) (111,320)
$1,202,608 $1,012,000
$ 130,192 $ 65,792
30,112 26,312
585,700 559,700
213,500 177,[email protected]
243.1M 182.096
$1,202,608 $1,012,mO
GALLEY CORPORATION
hcorno St€t€ment
For Yeer Ended December 31, 2011
Assets
Cash
Accounts rec€iable
Merchandise inentory
Equipment
Accum. depreciatkrn-E quipment
Total assets

19. Liabilidesand Equiry
Accounts payabh
hcometaxes payable
Comrnon stock, $2 par alue
Paid-in capital in excess of par alu€, colrmon stock
Rstain€d eamings
Totat liabilitios aM equity
Sales
Cost ofgoods sold
Gross prolit
Operating expenses
Depreciation expense
Other expenses
hcoma befure taxes
hcome taxes expense
hlet incorne
$ 56,800
533,458
s 2,053,500
1.273.fiA
780,330
5S0,258
lga,o72
37,064

20. $ 153.008
Addilional hformadon on Year 2017 Transaco"ons
a. Purchased equipfflent for $92,000 cash.
b. lssu€d 13,[email protected] shares ofcommon stock br$4.8O
cash pershare.
c. Declared and paid $92,000 in cash dividends.
Required:
Prcpare a compbte statBmenl of cash florys using a spreadslEet;
report op€rating aclivities und€r th€
indirect ffEthod- (Leavo no cslls blank - be cerlain to enter "0"
wherever required. &nit the "9"
sign in your response.)
a. Net incomo was $153,[email protected]
b. Accounts receimble increased.
c. Merchendise intentory inc'eased.
d. Accounls payable decreased-
e. lncorno taxes payable increased-
f. DepGciation exp€nse was 556,800.
g- Purchased equiprnent for $92,000 cash.
h. lssu€d 1 3,000 sharee at S4-8O cash por share-
i. Declared and paid $92,00O ofcash dividends.
1t2
'v24113 CHAPTER l2HOMEVVORK
GALLEY CORPORATION
Spreadsheet for Statement of Cash Flovus
For Year Ended December 31, 201 1

21. Pa,1 x- # /l
Balance sheet-debit bal. accor.mts
Cash
Accdrnts rcceirable
Merchandise inwntory
Equipment
Balance sheet---+redit bal. accounts
Accum. depreciation-Equip
Accounts payable
lncome taxes payable
Cornmon stock, $2 parralue
Paiclin excess of par ralue, common stock
Retained eamings
Statement of cash flo,r,s
Operating activties
Net income
lncrease in accounts receirable
lncroase in merch. in€ntory
Decrease in accounts payaHe
hcrease in income tax payable
Depreciation expense
lnr€sting actir,ities
Payment fur equipment

22. Financing actiities
lssued common stock for cash
Paid cash di,idends
December Analysis ofChanges December
31,2010 Detit Gredit 31,2011
$: : $t
$: $' :
chsk n w ork [email protected] Lhks (4) ref sencs
@0ll lhe lf ccraw+lill Cmpanies, All righb reseryed.
eztorfied oud.rDg ra*lf ll.carvtrnex z2