Problem 1 - Use the following selected data from Business Solutions' income statement for the three months ended March 31, 2012, and from its March 31, 2012, balance sheet to complete the requirements below: computer services revenue, $26,295; net sales (of goods), $21,546; total sales and revenue, $47,841; cost of goods sold, $14,664; net income, $19,818; quick assets, $90,472; current assets, $95,256; total assets, $122,968; current liabilities, $725; total liabilities, $725; and total equity, $122,243.

Required:

1. Compute the gross margin ratio (both with and without services revenue) and net profit margin ratio.

2. Compute the current ratio and acid-test ratio.

3. Compute the debt ratio and equity ratio.

4. What percent of its assets are current? What percent are long term?

Problem 2 - Cash flows from operating activities

Changes in current asset and current liability accounts for the year that relate to operations follow.

Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash provided or used by operating activities section of the statement of cash flows for this company using the direct method.

Problem 3 - Roney Company's calendar-year 2011 income statement shows the following: Net Income, $471,000; Depreciation Expense, $58,404; Amortization Expense, $11,775; Gain on Sale of Plant Assets, $3,600. An examination of the company's current assets and current liabilities reveals the following changes (all from operating activities): Accounts Receivable decrease, $12,800; Merchandise Inventory decrease, $37,120; Prepaid Expenses increase, $3,800; Accounts Payable decrease, $9,500; Other Payables increase, $1,444.

Use the indirect method to compute cash flow from operating activities.

Problem 4 - Cash flows from operating activities

Changes in current asset and current liability accounts for the year that relate to operations follow.

Use the above income statement and information about changes in noncash current assets and current liabilities to prepare only the cash flows from operating activities section of the statement of cash flows using the indirect method.

Problem 5 - Oregon Company disclosed the following information for its recent calendar year.

Required:

1. Prepare the operating activities section of the statement of cash flows using the indirect method.

Problem 6 -

a. Sold land costing $330,000 for $430,000 cash, yielding a gain of $30,000.

b. Paid $112,000 cash for a new truck.

c. Equipment with a book value of $81,000 and an original cost of $166,000 was sold at a loss of $31,000.

d. Long-term investments in stock were sold for $94,900 cash, yielding a gain of $17,000.

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

Problem 7 -

a. Net income was $466,000.

b. Issued common stock for $70,000 cash.

c. Paid cash dividend of $18,000.

d. Paid $125,000 cash to settle a note payable at its $125,000 maturity value.

e. Paid $117,000 cash to acquire its treasury stock.

f. Purchased equipment for $86,000 cash.

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

Problem 8 -

Use the above information about the cash flows of Kansas Company to prepare a complete statement of cash flows (direct method) for the year ended December 31, 2011. Use a note disclosure for any noncash investing and financing activities.

Problem 9 - Kazaam Company, a merchandiser, recently completed its calendar-year 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, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheets and income statement follow.

Additional Information on Year 2011 Transactions

a. The loss on the cash sale of equipment was $5,750 (details in b).

b. Sold equipment costing $46,500, with accumulated depreciation of $29,125, for $11,625 cash.

c. Purchased equipment costing $98,000 by paying $30,000 cash and signing a long-term note payable for the balance.

d. Borrowed $3,000 cash by signing a short-term note payable.

e. Paid $49,250 cash to reduce the long-term notes payable.

f. Issued 1,800 shares of common stock for $20 cash per share.

g. Declared and paid cash dividends of $54,300.

Required:

1. Prepare a complete statement of cash flows; report its operating activities using the indirect method.

Problem 10 - Kazaam Company, a merchandiser, recently completed its calendar-year 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, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's balance sheets and income statement follow.

Additional Information on Year 2011 Transactions

a. The loss on the cash sale of equipment was $5,625 (details in b).

b. Sold equipment costing $46,875, with accumulated depreciation of $29,625, for $11,625 cash.

c. Purchased equipment costing $98,875 by paying $25,000 cash and signing a long-term note payable for the balance.

d. Borrowed $5,000 cash by signing a short-term note payable.

e. Paid $59,375 cash to reduce the long-term notes payable.

f. Issued 2,350 shares of common stock for $20 cash per share.

g. Declared and paid cash dividends of $57,700.

Required: Prepare a complete statement of cash flows using a spreadsheet report its operating activities using the indirect method.

a. Net income was $120,225.

b. Accounts receivable increased.

c. Merchandise inventory increased.

d. Prepaid expenses decreased.

e. Accounts payable decreased.

f. Depreciation expense was $20,000.

g. Sold equipment costing $46,875, with accumulated depreciation of $29,625, for $11,625 cash. This yielded a loss of $5,625.

h. Purchased equipment costing $98,875 by paying $25,000 cash and (i.) by signing a long-term note payable for the balance.

j. Borrowed $5,000 cash by signing a short-term note payable.

k. Paid $59,375 cash to reduce the long-term notes payable.

l. Issued 2,350 shares of common stock for $20 cash per share.

m. Declared and paid cash dividends of $57,700.

Problem 11 - 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.

Additional Information on Year 2011 Transactions

a. Purchased equipment for $67,000 cash.

b. Issued 15,000 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.

Problem 12 - 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.

Additional Information on Year 2011 Transactions

a. Purchased equipment for $93,000 cash.

b. Issued 17,000 shares of common stock for $5.50 cash per share.

c. Declared and paid $85,000 in cash dividends.

Required: Prepare a complete statement of cash flows using a spreadsheet; report operating activities under the indirect method.

a. Net income was $143,136.

b. Accounts receivable increased.

c. Merchandise inventory increased.

d. Accounts payable decreased.

e. Income taxes payable increased.

f. Depreciation expense was $56,500.

g. Purchased equipment for $93,000 cash.

h. Issued 17,000 shares at $5.50 cash per share.

i. Declared and paid $85,000 of cash dividends.

Problem 13 - Rapture Company's 2011 income statement and selected balance sheet data at December 31, 2010 and 2011.

Required: Prepare the cash flows from operating activities section only of the company's 2011 statement of cash flows using the indirect method.