Revision Questions Ch 17 questions PDF

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Ex. 185 Planner Corporation's comparative balance sheets are presented below. PLANNER CORPORATION Comparative Balance Sheets December 31 Cash Accounts receivable Land Building Accumulated depreciation Total

2017 $ 21,570 18,200 18,000 70,000 (15,000) $112,770

2016 $ 10,700 23,400 26,000 70,000 (10,000) $120,100

Accounts payable Common stock Retained earnings Total

$ 12,370 75,000 25,400 $112,770

$31,100 69,000 20,000 $120,100

Additional information: 1. Net income was $27,900. Dividends declared and paid were $22,500. 2. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. The land was sold for $5,900. Instruction (a) Prepare a statement of cash flows for 2017 using the indirect method. (b) Compute free cash flow. Ans: N/A, LO: 2, 3, Bloom: AP, Difficulty: Hard, Min: 20, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

Ex. 186 Miroz Corporation's comparative balance sheets are presented below. MIROZ CORPORATION Comparative Balance Sheets December 31 Cash Accounts receivable Investments Equipment Accumulated depreciation Total

2017 $ 18,700 24,700 25,000 59,000 (14,500) $112,900

2016 $ 22,700 22,300 16,000 70,000 (10,000) $121,000

Accounts payable Bonds payable Common stock Retained earnings Total

$ 13,600 6,000 50,000 43,300 $112,900

$11,100 30,000 45,000 34,900 $121,000

Additional information: 1. Net income was $17,700. Dividends declared and paid were $9,300. 2. Equipment which cost $11,000 and had accumulated depreciation of $2,000 was sold for $4,000. 3. All other changes in noncurrent account balances had a direct effect on cash flows, except the change in accumulated depreciation. Instruction (a) Prepare a statement of cash flows for 2017 using the indirect method. (b) Compute free cash flow. Ans: N/A, LO: 2, 3, Bloom: AP, Difficulty: Hard, Min: 20, AACSB: None, AICPA BB: Legal/Regulatory, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting...