Intermediate accounting answers

Assignment 5-1

Requirements 1 and 2

a) Investing activities - cash paid for capital asset (18,000)
b) Financing activities - borrowed money 46,000
c) None; non-cash transaction
d) Financing activities - repaid note payable (200,000)
Cash flow for interest ($7,800) should be represented by interest expense and is separately disclosed as a cash outflow as part of operating activties, unless the company has decided it is a financing flow.
e) Operating activities - decrease in wages payable (8,000)
f) Operating activities - decrease in accounts receivable $76,000
g) Financing activities - paid dividend (97,000) Note: this cash outflow may also be classified in operating activtiies if the company wishes.
h) Operating activities - add back depreciation 67,000
i) Operating activities - deduct gain on sale (3,000) Investing activities - sold capital asset 13,000

Requirement 3

a) Investing activities - cash paid for capital asset (no change from above) (18,000)
b) Financing activities - borrowed money (no change from above) 46,000
c) None; non-cash transaction (no change from above)
d) Financing activities - repaid note payable (no change from above) (200,000) Operating activities - paid interest (may also be in financing activities if the company chooses) (7,800)
e) Operating activities - cash paid to employees (243,000)
f) Operating activities - collected cash from customers 1,071,000 g) Financing activities - paid dividend (no change from above) (97,000)
h) None – excluded from SCF
i) No disclosure of gain - excluded from SCF Investing activities - sold capital asset (no change from above) 13,000

Assignment 5-2

Cash flow
Case A
($26,400) Expense (3,900) Interest payable decrease 2,200 bond discount amortization

$ (28,100)
Case B
$125,700 Revenue (72,100) Interest receivable increase

$ 53,600
Case C
$794,300 Revenue (15,600) Accounts