Exercise 1 - Assume that Gulistan Inc. has the following accounts at the end of the current year.
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1.
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Common Stock
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14.
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Accumulated Depreciation-Buildings.
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2.
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Discount on Bonds Payable.
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15.
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Cash Restricted for Plant Expansion.
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3.
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Treasury Stock (at cost).
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16.
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Land Held for Future Plant Site.
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4.
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Notes Payable (short-term).
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17.
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Allowance for Doubtful Accounts-Accounts Receivable.
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5.
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Raw Materials
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18.
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Retained Earnings.
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6.
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Preferred Stock Investments (long-term).
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19.
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Paid-in Capital in Excess of Par-Common Stock.
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7.
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Unearned Rent Revenue.
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20.
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Unearned Subscriptions Revenue.
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8.
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Work in Process.
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21.
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Receivables-Officers (due in one year).
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9.
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Copyrights.
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22.
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Finished Goods.
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10.
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Buildings.
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23.
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Accounts Receivable.
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11.
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Notes Receivable (short-term).
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24.
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Bonds Payable (due in 4 years).
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12.
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Cash.
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13.
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Salaries and Wages Payable.
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Prepare a classified balance sheet in good form.
Exercise 2 - Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31.
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2012
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2011
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Cash
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$233,616
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$116,064
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Accounts receivable
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267,840
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275,280
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Investments
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77,376
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110,112
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Equipment
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443,424
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357,120
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Less: Accumulated depreciation-equipment
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(157,728)
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(132,432)
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Current liabilities
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199,392
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224,688
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Capital stock
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238,080
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238,080
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Retained earnings
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427,056
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263,376
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Additional information: Investments were sold at a loss (not extraordinary) of $10,416; no equipment was sold; cash dividends paid were $74,400; and net income was $238,080.
(a) Prepare a statement of cash flows for 2012 for Sondergaard Corporation.
(b) Determine Sondergaard Corporation's free cash flow.