Salud Company reports net income of $480,000 for the year ended December 31, 2013. It also reports $86,400 depreciation expense and a $12,000 gain on the sale of machinery. Its comparative balance sheets reveal a $38,400 increase in accounts receivable, $19,680 increase in accounts payable, $10,560 decrease in prepaid expenses, and $14,880 decrease in wages payable.

Salud Company reports net income of $480,000 for the year ended December 31, 2013. It also reports $86,400 depreciation expense and a $12,000 gain on the sale of machinery. Its comparative balance sheets reveal a $38,400 increase in accounts receivable, $19,680 increase in accounts payable, $10,560 decrease in prepaid expenses, and $14,880 decrease in wages payable.

Required:

Prepare only the operating activities section of the statement of cash flows for 2013 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Use the above information to determine this company's cash flows from investing activities.

a.	Equipment with a book value of $80,500 and an original cost of $168,000 was sold at a loss of $34,000.
b.	Paid $103,000 cash for a new truck.
c.	Sold land costing $310,000 for $420,000 cash, yielding a gain of $110,000.
d.	Long-term investments in stock were sold for $95,600 cash, yielding a gain of $15,500.

  

Use the above information to determine this company's cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

Explanation: Cash received from sale of equipment = Book value − loss = $80,500 − $34,000 = $46,500

A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $60,000. The entry to record this exchange is

A corporation issued 5,000 shares of $10 par value common stock in exchange for some land with a market value of $60,000. The entry to record this exchange is:

Debit Land $60,000; credit Common Stock $50,000; credit Paid-In Capital in Excess of Par Value, Common Stock $10,000.

Debit Common Stock $60,000; credit Land $60,000.

Debit Common Stock $50,000; debit Paid-In Capital in Excess of Par Value, Common Stock $10,000; credit Land $60,000.

Debit Land $60,000; credit Common Stock $60,000.

Debit Land $50,000; credit Common Stock $50,000.

Answer

Debit Land $60,000; credit Common Stock $50,000; credit Paid-In Capital in Excess of Par Value, Common Stock $10,000.

A company had a beginning balance in retained earnings of $43,000. It had net income of $6,000 and paid out cash dividends of $5,625 in the current period. The ending balance in retained earnings equals:

A company had a beginning balance in retained earnings of $43,000. It had net income of $6,000 and paid out cash dividends of $5,625 in the current period. The ending balance in retained earnings equals:

$54,625.

$49,000.

$11,625.

$42,625.

$43,375.

A company's board of directors votes to declare a cash dividend of $.75 per share. The company has 15,000 shares authorized, 10,000 issued, and 9,500 shares outstanding. The total amount of the cash dividend is

A company's board of directors votes to declare a cash dividend of $.75 per share. The company has 15,000 shares authorized, 10,000 issued, and 9,500 shares outstanding. The total amount of the cash dividend is:

$10,250.

$7,500.

$7,125.

$14,625.

$11,250.

$0.75 * 9,500 shares = $7,125

York’s outstanding stock consists of 46,000 shares of cumulative 8.50% preferred stock with a $10 par value and also 115,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

York’s outstanding stock consists of 46,000 shares of cumulative 8.50% preferred stock with a $10 par value and also 115,000 shares of common stock with a $1 par value. During its first four years of operation, the corporation declared and paid the following total cash dividends.

 

2013	$	31,000
2014		32,725
2015		81,600
2016		124,100

 

Determine the amount of dividends paid each year to each of the two classes of stockholders assuming that the preferred stock is cumulative. Also determine the total dividends paid to each class for the four years combined. (Round your "Dividend per Preferred Share" answers to 2 decimal places.) Explanation:   Cumulative Preferred Common   2013 ($31,000 paid)           Preferred* $ 31,000           Common—remainder     $ 0       Total for the year $ 31,000     $ 0       (Note: $8,100 in preferred stock dividends in arrears.)                     2014 ($32,725 paid)           Preferred—arrears from 2013 $ 8,100           Preferred* $ 24,625           Common—remainder     $ 0       Total for the year $ 32,725     $ 0       (Note: $14,475 in preferred stock dividends in arrears.)                     2015 ($81,600 paid)           Preferred—arrears from 2014 $ 14,475           Preferred* $ 39,100           Common—remainder     $ 28,025       Total for the year $ 53,575       28,025       (Note: $0 in preferred stock dividends in arrears.)                     2016 ($124,100 paid)           Preferred* $ 39,100           Common—remainder     $ 85,000       Total for the year $ 39,100     $ 85,000       (Note: $0 in preferred stock dividends in arrears.)                     2013-2016 ($269,425 paid)             Total for four years $ 156,400     $ 113,025       * The holders of the cumulative preferred stock are entitled to no more than $39,100 of dividends declared in    any year (8.50% × $10 × 46,000 shares) plus any dividends skipped in prior years.

Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2013, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 15,000 pounds. The exchange rate on that day for £1 was $2.0321.

Leigh of New York sells its products to customers in the United States and the United Kingdom. On December 16, 2013, Leigh sold merchandise on credit to Bronson Ltd. of London at a price of 15,000 pounds. The exchange rate on that day for £1 was $2.0321. On December 31, 2013, when Leigh prepared its financial statements, the rate was £1 for $2.0260. Bronson paid its bill in full on January 15, 2014, at which time the exchange rate was £1 for $2.0280. Leigh immediately exchanged the 15,000 pounds for U.S. dollars.

 

Prepare Leigh’s journal entries on December 16, December 31, and January 15. (Round your intermediate calculations and final answers to the nearest dollar amount.) Explanation: Dec. 16, 2013 Record credit sales (15,000 × $2.0321) = $30,481   Dec. 31, 2013 Record year-end adjustment.     Foreign Exchange Loss           Original measure = (15,000 × $2.0321)   $ 30,481       Year-end measure = (15,000 × $2.0260)     30,390             Loss for the period   $ 91               Jan. 15, 2014 Cash (15,000 × $2.0280) = $30,420     Foreign Exchange Gain   Year-end measure = (15,000 × $2.0260) $ 30,390     Final measure    = (15,000 × $2.0280)     30,420             Gain for the period $ 30