Rasheed Company reports net income of $540,000 for the year ended December 31, 2011. It also reports $97,200 depreciation expense and a $11,000 gain on the sale of machinery. Its comparative balance sheets reveal a $43,200 increase in accounts receivable, $22,140 increase in accounts payable, $11,880 decrease in prepaid expenses, and $16,740 decrease in wages payable. Required: Prepare only the operating activities section of the statement of cash flows for 2011 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Rasheed Company reports net income of $540,000 for the year ended December 31, 2011. It also reports $97,200 depreciation expense and a $11,000 gain on the sale of machinery. Its comparative balance sheets reveal a $43,200 increase in accounts receivable, $22,140 increase in accounts payable, $11,880 decrease in prepaid expenses, and $16,740 decrease in wages payable.

 

Required:

Prepare only the operating activities section of the statement of cash flows for 2011 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

A company reported average total assets of $245,000 in 2010 and $286,000 in 2011. Its net operating cash flow in 2010 was $17,000 and $31,250 in 2011. Calculate its cash flow on total assets ratio for both years.

A company reported average total assets of $245,000 in 2010 and $286,000 in 2011. Its net operating cash flow in 2010 was $17,000 and $31,250 in 2011.

  

Calculate its cash flow on total assets ratio for both years.

Galley Corp., a merchandiser, recently completed its 2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow. GALLEY CORPORATION Comparative Balance Sheets December 31, 2011 and 2010 2011 2010 Assets Cash $ 87,000 $ 117,000 Accounts receivable 84,000 71,000 Merchandise inventory 620,000 515,000 Equipment 335,000 269,000 Accum. depreciation—Equipment (157,000) (101,000) Total assets $ 969,000 $ 871,000 Liabilities and Equity Accounts payable $ 66,000 $ 90,000 Income taxes payable 22,000 19,000 Common stock, $2 par value 596,000 568,000 Paid-in capital in excess of par value, common stock 203,000 161,000 Retained earnings 82,000 33,000 Total liabilities and equity $ 969,000 $ 871,000 GALLEY CORPORATION Income Statement For Year Ended December 31, 2011 Sales $ 1,798,000 Cost of goods sold 1,088,000 Gross profit 710,000 Operating expenses Depreciation expense $ 56,000 Other expenses 499,000 555,000 Income before taxes 155,000 Income taxes expense 21,000 Net income $ 134,000 Additional Information on Year 2011 Transactions a. Purchased equipment for $66,000 cash. b. Issued 14,000 shares of common stock for $5 cash per share. c. Declared and paid $85,000 in cash dividends. Required: Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Galley Corp., a merchandiser, recently completed its 2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow.

 

GALLEY CORPORATION Comparative Balance Sheets December 31, 2011 and 2010
	2011			2010
Assets
Cash	$	87,000		$	117,000
Accounts receivable		84,000			71,000
Merchandise inventory		620,000			515,000
Equipment		335,000			269,000
Accum. depreciation—Equipment		(157,000)			(101,000)
Total assets	$	969,000		$	871,000
Liabilities and Equity
Accounts payable	$	66,000		$	90,000
Income taxes payable		22,000			19,000
Common stock, $2 par value		596,000			568,000
Paid-in capital in excess of par value, common stock		203,000			161,000
Retained earnings		82,000			33,000
Total liabilities and equity	$	969,000		$	871,000

  

GALLEY CORPORATION Income Statement For Year Ended December 31, 2011
Sales				$	1,798,000
Cost of goods sold					1,088,000
Gross profit					710,000
Operating expenses
Depreciation expense	$	56,000
Other expenses		499,000			555,000
Income before taxes					155,000
Income taxes expense					21,000
Net income				$	134,000

 

Additional Information on Year 2011 Transactions
a.	Purchased equipment for $66,000 cash.
b.	Issued 14,000 shares of common stock for $5 cash per share.
c.	Declared and paid $85,000 in cash dividends.

    

Required:

Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Exercise 12-10 Preparation of statement of cash flows (indirect) L.O. P1 [The following information applies to the questions displayed below.] Use the following financial statements and additional information. GECKO INC. Comparative Balance Sheets June 30, 2011 and 2010 2011 2010 Assets Cash $ 75,650 $ 51,100 Accounts receivable, net 75,800 58,800 Inventory 76,550 109,550 Prepaid expenses 5,850 5,600 Equipment 144,800 135,800 Accum. depreciation—Equipment (28,850 ) (10,850 ) Total assets $ 349,800 $ 350,000 Liabilities and Equity Accounts payable $ 28,400 $ 36,400 Wages payable 10,200 18,200 Income taxes payable 2,800 4,200 Notes payable (long term) 29,450 79,450 Common stock, $5 par value 206,000 156,000 Retained earnings 72,950 55,750 Total liabilities and equity $ 349,800 $ 350,000 GECKO INC. Income Statement For Year Ended June 30, 2011 Sales $ 879,000 Cost of goods sold 562,560 Gross profit 316,440 Operating expenses Depreciation expense $ 79,884 Other expenses 91,697 Total operating expenses 171,581 144,859 Other gains (losses) Gain on sale of equipment 2,813 Income before taxes 147,672 Income taxes expense 50,947 Net income $ 96,725 Additional Information a. A $50,000 note payable is retired at its $50,000 carrying (book) value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $79,884 cash. d. Received cash for the sale of equipment that had cost $70,884, yielding a $2,813 gain. e. Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit.

(2)

Compute the company's cash flow on total assets ratio for its fiscal year 2011.