The comparative statements of financial position for Amaral Reis Company SA as of December 31 are presented as follows.
AMARAL REIS COMPANY SA
Comparative Statements of Financial Position
December 31
Assets 2017 2016
Land R$145,000 R$130,000
Equipment 228,000 155,000
Accumulated depreciation—equipment (45,000) (35,000)
Buildings 200,000 200,000
Accumulated depreciation—buildings (60,000) (40,000)
Prepaid expenses 18,280 21,000
Inventory 154,550 142,000
Accounts receivable 46,000 62,000
Cash 62,520 45,000
Total R$749,350 R$680,000
Equity and Liabilities
Share capital—ordinary, R$1 par R$195,000 R$160,000
Retained earnings 208,000 180,000
Bonds payable 300,000 300,000
Accounts payable 46,350 40,000
Total R$749,350 R$680,000
Additional information:
• 1.Operating expenses include depreciation expense of R$40,000.
• 2.Land was sold for cash at a book value of R$20,000.
• 3.Cash dividends of R$20,000 were paid.
• 4.Net income for 2017 was $54,000.
• 5.Equipment was purchased for R$95,000 cash. In addition, equipment costing R$22,000 with a book value of R$12,000 was sold for R$6,000 cash.
• 6. Issued 35,000 shares of R$1 par value ordinary shares in exchange for land with a fair value of R$35,000.
Instructions
Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method.
Cash from operations R$106,520
The comparative statements of financial position for Amaral Reis Company SA as of December 31 are presented as follows.
AMARAL REIS COMPANY SA
Comparative Statements of Financial Position
December 31
Assets 2017 2016
Land R$145,000 R$130,000
Equipment 228,000 155,000
Accumulated depreciation—equipment (45,000) (35,000)
Buildings 200,000 200,000
Accumulated depreciation—buildings (60,000) (40,000)
Prepaid expenses 18,280 21,000
Inventory 154,550 142,000
Accounts receivable 46,000 62,000
Cash 62,520 45,000
Total R$749,350 R$680,000
Equity and Liabilities
Share capital—ordinary, R$1 par R$195,000 R$160,000
Retained earnings 208,000 180,000
Bonds payable 300,000 300,000
Accounts payable 46,350 40,000
Total R$749,350 R$680,000
Additional information:
• 1.Operating expenses include depreciation expense of R$40,000.
• 2.Land was sold for cash at a book value of R$20,000.
• 3.Cash dividends of R$20,000 were paid.
• 4.Net income for 2017 was $54,000.
• 5.Equipment was purchased for R$95,000 cash. In addition, equipment costing R$22,000 with a book value of R$12,000 was sold for R$6,000 cash.
• 6. Issued 35,000 shares of R$1 par value ordinary shares in exchange for land with a fair value of R$35,000.
Instructions
Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method.
Cash from operations R$106,520
Related questions
Instructions: Prepare astatement of cash flows for the year ended December 31, 2017, usingthe indirect method. The
comparativestatements of financial position for Amaral Reis Company SA as ofDecember 31 are
presented below:
| AMARAL REIS COMPANY SA Comparative Statements of FinancialPosition December 31 | ||||
Assets | 2017 | 2016 | ||
Land | R | 145,000 | R | 130,000 |
Equipment | 228,000 | 155,000 | ||
Accumulated DepreciationâEquipment | -45,000 | -35,000 | ||
Buildings | 200,000 | 200,000 | ||
Accumulated DepreciationâBuildings | -60,000 | -40,000 | ||
Prepaid expenses | 18,280 | 21,000 | ||
Inventory | 154,550 | 142,000 | ||
Accounts Receivable | 46,000 | 62,000 | ||
Cash | 62,520 | 45,000 | ||
Total | R | 749,350 | R | 680,000 |
Equity and Liabilities | ||||
Share capital-ordinary, 1 par | R | 195,000 | R | 160,000 |
Retained earnings | 208,000 | 180,000 | ||
Bonds payable | 300,000 | 300,000 | ||
Accounts Payable | 46,350 | 40,000 | ||
Total | R | 749,350 | R | 680,000 |
The following transactions occurred during2017:
Operating expenses include depreciation expense ofR$45,500.
Land was sold for cash at book value ofR$20,000.
Cash dividends of R$20,000 were paid.
Net income for 2017 was R$54,000.
Equipment was purchased for R$95,000 cash. In addition,equipment costing R$22,000 with a book value of R$12,000 was soldfor R$6,000 cash.
Issued 35,000 shares of R$1 par value ordinary shares inexchange for land with a fair value of R$35,000.
Instructions: Prepare a statement of cash flows for the yearended December 31, 2017, using the indirect method.
| AMARAL REIS COMPANY SA Statement of Cash Flows For the Year Ended December 31, 2017 | ||
| Cash flows from OperatingActivities:
| ||
Net cash provided by Operating Activities: | ||
Cash flows from InvestingActivities: | ||
Net cash provided by Investing Activities: | ||
Cash flows from FinancingActivities: | ||
Net cash provided by Financing Activities: | ||
Net increase/decrease in cash: | ||
Cash at beginning of period: | ||
Cash at end of period: | ||
Note: (if necessary) | ||
Lea Company acquired all of Tenzing Corporation's stock on January 1, 20X6 for $150,000 cash. On December 31, 20X8, the trial balances of the two companies were as follows:
| Lea company | Tenzing Corp. | |||
| Debit | Credit | Debit | Credit | |
| Cash | $90,000 | $58,000 | ||
| Accounts Receivable | 97,000 | 55,000 | ||
| Land | 80,000 | 45,000 | ||
| Buildings and Equipment | 300,000 | 200,000 | ||
| Investment in Tenzing Corporation | 180,000 | |||
| Cost of Services Provided | 140,000 | 75,000 | ||
| Depreciation Expense | 30,000 | 20,000 | ||
| Other Expenses | 70,000 | 35,000 | ||
| Dividends Declared | 40,000 | 20,000 | ||
| Accumulated Depreciation | $180,000 | $100,000 | ||
| Accounts Payable | 42,000 | 18,000 | ||
| Taxes Payable | 20,000 | 20,000 | ||
| Notes Payable | 75,000 | 50,000 | ||
| Common Stock | 100,000 | 50,000 | ||
| Retained Earnings | 265,000 | 90,000 | ||
| Service Revenue | 300,000 | 180,000 | ||
| Income from Subsidiary | 45,000 | |||
| $1,027,000 | $1,027,000 | $508,000 | $508,000 | |
Tenzing Corporation reported retained earnings of $75,000 at the date of acquisition. The difference between the acquisition price and underlying book value is assigned to buildings and equipment with a remaining economic life of five years from the date of acquisition. At December 31, 20X8, Tenzing owed Lea $4,000 for services provided.
4. Based on the preceding information, all of the following are consolidating entries required on December 31, 20X8, to prepare consolidated financial statements, except:
| A) | Common Stock | 50,000 | |
| Retained Earnings | 90,000 | ||
| Income from Tenzing Corp. | 50,000 | ||
| Dividends declared | 20,000 | ||
| Investment in Tenzing Corp. | 170,000 | ||
| B) | Accounts Payable | 4,000 | |
| Accounts Receivable | 4,000 | ||
| C) | Depreciation Expense | 5,000 | |
| Income from Tenzing Corp. | 5,000 | ||
| D) | Buildings and Equipment | 20,000 | |
| Accumulated Depreciation | 10,000 | ||
| Investment in Tenzing Corp. | 10,000 |
Option A
Option B
Option C
Option D
5. Based on the preceding information, what amount will be reported as total assets in the consolidated balance sheet for 20X8?
$666,000
$747,000
$651,000
$946,000
6. Based on the preceding information, what amount will be reported for total accounts payable in the consolidated balance sheet for the year 20X8?
$56,000
$46,000
$60,000
$42,000
The comparative balance sheets for Rothlisberger Company as ofDecember 31 are presented below.
| Assets | 2017 | 2016 |
|---|---|---|
| Cash | $58,200 | $46,000 |
Accounts Receivable | $41,100 | $63,400 |
| Inventory | $148,900 | $145,600 |
| Prepaid Expenses | $15,000 | $27,600 |
| Land | $101,900 | $133,300 |
| Buildings | $200,200 | $200,200 |
| Accumulated Depreciation - Buildings | $60,300 | $33,600 |
| Equipment | $228,500 | $155,400 |
| Accumulated Depreciation - Equipment | $42,600 | $36,300 |
| Total | $690,900 | $701,600 |
| LIABIITIES AND STOCKHOLDERS EQUITY | ||
| Accounts Payable | $46,000 | $39,700 |
| Bonds Payable | $260,000 | $293,600 |
| Common stock, $1 Par | $193,600 | $208,300 |
| Retained Earnings | $191,300 | $208,300 |
| Total | $690,900 | $701,600 |
Additional information:
| 1. | Operating expenses include depreciation expense of $42,000 andcharges from prepaid expenses of $12,600. | |
| 2. | Land was sold for cash at book value. | |
| 3. | Cash dividends of $61,000 were paid. | |
| 4. | Net income for 2017 was $44,000. | |
| 5. | Equipment was purchased for $94,900 cash. In addition,equipment costing $21,800 with a book value of $12,800 was sold for$5,900 cash. | |
| 6. | Bonds were converted at face value by issuing 33,600 shares of$1 par value common stock. |
Prepare a statement of cash flows for the year ended December 31,2017, using the indirect method. (Show amounts thatdecrease cash flow with either a - sign e.g. -15,000 or inparenthesis e.g. (15,000).)
