Student Name: Instructor

Class: McGraw-Hill/Irwin
Problem 21-02

WRIGHT COMPANY
Spreadsheet for the Statement of Cash Flows

Dec. 31 Changes Dec. 31

2020 Debits Credits 2021
Balance Sheet
Assets:
Cash 30 12 42
Accounts receivable 75 2 73
Short-term investment 15 25 40
Inventory 70 5 75
Land 60 10 50
Buildings and equipment 400 150 550
Less: Acc. depreciation (75) 40 (115)
575 715
Liabilities:
Accounts payable 35 7 28
Salaries payable 5 3 2
Interest payable 3 2 5
Income tax payable 12 3 9
Notes payable 30 30 -
Bonds payable 100 60 160

Shareholders' Equity:
Common stock 200 50 250
Paid-in capital - excess of par 100 26 126
Retained earnings 90 35 80 135
575 715

Statement of Income
Revenues:
Sales revenue 380 380
Expenses:
Cost of goods sold 130 (130)
Salaries expense 45 (45)
Depreciation expense 40 (40)
Interest expense 12 (12)
Loss on sale of land 3 (3)
Income tax expense 70 (70)
Net income 80 80
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-02

Statement of Cash Flows

Operating activities:
Cash inflows:
From customers 382
Cash outflows:
To suppliers of goods 142
To employees 48
For interest expense 10
For income taxes 73
Net cash flows 109

Investing activities:
Sale of land 7
Purchase of short-term investment 25
Purchase of equipment 150
Net cash flows (168)

Financing activities:
Repayment of notes payable 30
Sale of bonds payable 60
Sale of common stock 76
Payment of dividends 35
Net cash flows 71

Net increase in cash 12 12

Totals 1,175 1,175
Correct! Correct!
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-02

WRIGHT COMPANY
Statement of Cash Flows
For year ended December 31, 2021 (in $000)

Cash flows from operating activities:

Cash inflows:
From customers $ 382
Cash outflows:
To suppliers of goods (142)
To employees (48)
For interest (10)
For income taxes (73)
Net cash flows from operating activities $ 109
Correct!
Cash flows from investing activities:
Sale of land 7
Purchase of short-term investment (25)
Purchase of equipment (150)
Net cash flows from investing activities (168)
Correct!
Cash flows from financing activities:
Repayment of notes payable (30)
Sale of bonds payable 60
Sale of common stock 76
Payment of dividends (35)
Net cash flows from financing activities 71
Correct!
Net increase in cash 12
Cash balance, January 1 30
Cash balance, December 31 $ 42
Correct!
Given Data P21-02:

WRIGHT COMPANY

Balance Sheet and Income Statement

data are given in the problem.

Additional information:
Original land cost $ 10,000
Land selling price $ 7,000
Common stock purchase $ 25,000
New equipment cost $ 150,000
Note payment, 1/1/2021 $ 30,000
Bond sale, 1/1/2021 $ 60,000
Common stock sold $ 76,000
Common stock par $ 50,000
Net income $ 80,000
Cash dividends paid $ 35,000
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-04

DUX COMPANY
Spreadsheet for the Statement of Cash Flows ($ in 000s)

Dec. 31 Changes Dec. 31

2020 Debits Credits 2021
Balance Sheet
Asset:
Cash 20 13 33
Accounts receivable 50 2 48
Less: Allowance (3) 1 (4)
Dividends receivable 2 1 3
Inventory 50 5 55
Long-term investment 10 5 15
Land 40 30 70
Buildings and equipment 250 15 40 225
Less: Accum. depreciation (50) 30 5 (25)
369 420

Liabilities:
Accounts payable 20 7 13
Salaries payable 5 3 2
Interest payable 2 2 4
Income tax payable 8 1 7
Notes payable - 30 30
Bonds payable 70 25 95
Less: Discount on bonds (3) 1 (2)

Shareholders' Equity:
Common stock 200 10 210
Paid-in capital - excess of par 20 4 24
Retained earnings 47 14
13 25 45
Less: Treasury stock - 8 (8)
369 420

Statement of Income
Revenues:
Sales revenue 200 200
Dividend revenue 3 3
Expenses:
Cost of goods sold 120 (120)
Salaries expense 25 (25)
Depreciation expense 5 (5)
Bad debt expense 1 (1)
Interest expense 8 (8)
Loss on sale of building 3 (3)
Income tax expense 16 (16)
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-04

Net income 25 25
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-04

Statement of Cash Flows

Operating activities:
Cash inflows:
From customers 202
From dividends received 2
Cash outflows:
To suppliers of goods 132
To employees 28
For interest 5
For income taxes 17
Net cash flows 22

Investing activities:
Sale of building 7
Purchase of long-term investment 5
Purchase of equipment 15
Net cash flows (13)

Financing activities:
Sale of bonds payable 25
Payment of dividends 13
Purchase of treasury stock 8
Net cash flows 4
Net increase in cash 13 13
Totals 584 584
Correct! Correct!
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-04

DUX COMPANY
Statement of Cash Flows
For year ended December 31, 2021 (in $000)

Cash flows from operating activities:

Cash inflows:
From customers $ 202
From dividends received 2
Cash outflows:
To suppliers of goods (132)
To employees (28)
For interest (5)
For income taxes (17)
Net cash flows from operating activities $ 22
Correct!
Cash flows from investing activities:
Sale of building 7
Purchase of long-term investment (5)
Purchase of equipment (15)
Net cash flows from investing activities (13)
Correct!
Cash flows from financing activities:
Sale of bonds payable 25
Payment of dividends (13)
Purchase of treasury stock (8)
Net cash flows from financing activities 4
Correct!
Net increase in cash 13

Cash balance, January 1 20

Cash balance, December 31 $ 33
Correct!
Noncash investing and financing activities:

Acquired $30,000 of land by issuing a 13%, 7-year note. $ 30

Correct!
Given Data P21-04:

DUX COMPANY

Balance Sheet and Income Statement data are given in the

solution.

Additional information:
Building cost $ 40,000
Building selling price $ 7,000
Building depreciated 3/4
Common stock purchased as long term investment $ 5,000
Note payable for property $ 30,000
Note payable interest 13%
Equipment purchase $ 15,000
Bond sale, 1/1/21 $ 25,000
Stock dividend issue (1,000 shares) 5%
Common stock par value $ 10
Market price per share $ 14
Cash dividends paid $ 13,000
Number of common stock shares repurchased 500
Common stock repurchase cost $ 8,000
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-05

METAGROBOLIZE INDUSTRIES
Spreadsheet for the Statement of Cash Flows ($ in 000s)

Dec. 31 Changes Dec. 31

2020 Debits Credits 2021
Balance Sheet
Assets:
Cash 375 205 580
Accounts receivable 450 150 600
Inventory 525 375 900
Land 600 150 75 675
Building 900 900
Less: Accum depreciation (270) 30 (300)
Equipment 2,250 900 300 2,850
Less: Accum depreciation (480) 270 315 (525)
Patent 1,500 300 1,200
5,850 6,880
Liabilities:
Accounts payable 450 300 750
Accrued expenses 225 75 300
Lease liability - land - 20 150 130

Shareholders' Equity:
Common stock 3,000 150 3,150
Paid-in capital - excess of par 675 75 750
Retained earnings 1,500 225 975
450 1,800
5,850 6,880

Income Statement
Revenues:
Sales revenue 2,645 2,645
Gain on sale of land 90 90
Expenses:
Cost of goods sold 600 (600)
Depreciation expense-build. 30 (30)
Depreciation expense-equip. 315 (315)
Loss on sale of equipment 15 (15)
Amortization expense 300 (300)
Operating expenses 500 (500)
Net income 975 975
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-05

Statement of Cash Flows

Operating activities:
Cash inflows:
From customers 2,495
Cash outflows:
To suppliers of goods 675
For operating expenses 425
Net cash flows 1,395

Investing activities:
Purchase of equipment 900
Sale of land 165
Sale of equipment 15
Net cash flows (720)

Financing activities:
Payment on lease liability 20
Payment of cash dividends 450
Net cash flows (470)
Net increase in cash 205 205
Totals 8,155 8,155
Correct! Correct!

METAGROBOLIZE INDUSTRIES
Statement of Cash Flows
For year ended December 31, 2021 (in $000)

Cash flows from operating activities:

Cash inflows:
From customers $ 2,495
Cash outflows:
To suppliers of goods (675)
For operating expenses (425)
Net cash flows from operating activities $ 1,395
Correct!
Cash flows from investing activities:
Purchase of equipment (900)
Sale of land 165
Sale of equipment 15
Net cash flows from investing activities (720)
Correct!
Cash flows from financing activities:
Payment on lease liability (20)
Payment of dividends (450)
Net cash flows from financing activities (470)
Correct!
Net increase in cash 205

Cash balance, January 1 375

Cash balance, December 31 $ 580
Correct!
Noncash investing and financing activities:
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-05

Land acquired by lease $ 150

Correct!
Given Data P21-05:

METAGROBOLIZE INDUSTRIES

Balance Sheet and Income Stat

are given in the solution.

Additional information:
Annual payments on lease $ 20,000
Equipment cost $ 300,000
Depreciated 90%
Stock dividend $ 225,000
Cash dividend $ 450,000
 Student Name: Instructor
Class: McGraw-Hill/Irwin
Problem 21-18

ARDUOUS COMPANY
Spreadsheet for the Statement of Cash Flows ($ in 000s)

Dec. 31 Changes Dec. 31

2020 Debits Credits 2021
Balance Sheet
Asset:
Cash 81 28 109
Accounts receivable 194 4 190
Investment revenue receivable 4 2 6
Inventory 200 5 205
Prepaid insurance 8 4 4
Long-term investment 125 6
25 156
Land 150 46 196
Buildings and equipment 400 82 70 412
Less: Accumulated depreciation (120) 35 12 (97)
Patent 32 2 30
1,074 1,211

Liabilities:
Accounts payable 65 15 50
Salaries payable 11 5 6
Interest payable (bonds) 4 4 8
Income tax payable 14 2 12
Deferred tax liability 8 3 11
Notes payable - 23 23
Lease liability - 7 82 75
Bonds payable 275 60 215
Less: Discount on bonds (25) 3 (22)

Shareholders' Equity:
Common stock 410 20 430
Paid-in capital - excess of par 85 10 95
Preferred stock - 75 75
Retained earnings 227 30
22 67 242
Less: Treasury stock - 9 (9)
1,074 1,211
Statement of Cash Flows
Operating activities:
Net income 67
Adjustments for noncash effects:
Depreciation expense 12
Amortization expense 2
Amortization of discount 3
Decrease in accounts receivable 4
Increase in investment revenue receivable 2
Equity method income 6
Decrease in prepaid insurance 4
Increase in inventory 5
Decrease in accounts payable 15
Decrease in salaries payable 5
Increase in interest payable 4
Decrease in tax payable 2
Increase in deferred tax liability 3
Loss on equipment damage 18
Net cash flows 82

Investing activities:
Sale of equipment 17
Purchase of LT investment 25
Purchase of land 23
Net cash flows (31)

Financing activities:
Payment on lease liability 7
Retirement of bonds payable 60
Sale of preferred stock 75
Payment of dividends 22
Purchase of treasury stock 9
Net cash flows (23)
Net increase in cash 28 28
Totals 588 588
Correct! Correct!
 ARDUOUS COMPANY
Statement of Cash Flows
For year ended December 31, 2021 (in $000)

Cash flows from operating activities:

Net income $ 67
Adjustments for noncash effects:
Depreciation expense 12
Amortization expense 2
Amortization of discount 3
Loss on equipment 18
Changes in operating assets and liabilities:
Decrease in accounts receivable 4
Increase in investment revenue receivable (2)
Increase in investment due to equity method income (6)
Decrease in prepaid insurance 4
Increase in inventory (5)
Decrease in accounts payable (15)
Decrease in salaries payable (5)
Increase in interest payable 4
Decrease in income tax payable (2)
Increase in deferred tax liability 3
Net cash flows from operating activities $ 82
Correct!
Cash flows from investing activities:
Sale of equipment 17
Purchase of long-term investment (25)
Purchase of land (23)
Net cash flows from investing activities (31)
Correct!
Cash flows from financing activities:
Payment on lease liability (7)
Retirement of bonds payable (60)
Sale of preferred stock 75
Payment of dividends (22)
Purchase of treasury stock (9)
Net cash flows from financing activities (23)
Correct!
Net increase in cash 28

Cash balance, January 1 81

Cash balance, December 31 $ 109
Correct!
Noncash investing and financing activities:
Acquired $82 million building by 15-year lease.
Acquired $46 million of land by issuing cash and a 15%, 4-year note
as follows:
Cost of land $ 46
Cash paid 23
Note issued $ 23
Correct!
Given Data P21-18:

ARDUOUS COMPANY

Balance Sheet data is given in the solution.

ARDUOUS COMPANY
Income Statement for Year Ended
December 31, 2021
($ in millions)

Revenues and gain:

Sales revenue $ 410
Investment revenue 11
Gain on sale of treasury bills 2 $ 423

Expenses and loss:

Cost of goods sold 180
Salaries expense 73
Depreciation expense 12
Amortization expense 2
Insurance expense 7
Interest expense 28
Loss on sale of equipment 18
Income tax expense 36 356
Net income $ 67

Additional information:
Share of the net income of Demur Company shown as revenue $ 6,000,000
Gain on sale of treasury bills $ 2,000,000
Equipment cost $ 70,000,000
Unharmed machine components sold $ 17,000,000
Machine depreciated 1/2
Increase in deferred income tax liability $ 3,000,000
Preferred stock of Tory Corporation purchased as long-term investment $ 25,000,000
Land cost $ 46,000,000
Cash paid in land purchase $ 23,000,000
Note issued in land purchase $ 23,000,000
Note interest rate 15%
Note maturity in years 4
Term of lease for building purchase in years 15
Present value of building lease payments $ 82,000,000
Annual lease payments $ 7,000,000
Bonds retired at maturity $ 60,000,000
Stock dividend issue (4,000,000 shares) 5%
Par value of common stock $ 5.00
Market price of common stock at time of stock dividend $ 7.50
Common stock repurchased as treasury stock $ 9,000,000
Number of shares repurchased 1,000,000