Question

1.Equipment with a book value of $82,000 and an original cost of $161,000 was sold at a loss of $33,000. Paid $100,000 cash for a new truck. Sold land costing $310,000 for $405,000 cash, yielding a gain of $95,000. Long-term investments in stock were sold for $92,100 cash, yielding a gain of $14,000. Use the above information to determine cash flows from investing activities. (Amounts to be deducted should be indicated with a minus sign.)

2.

1. Net income was $467,000.
2. Issued common stock for $74,000 cash.
3. Paid cash dividend of $13,000.
4. Paid $125,000 cash to settle a note payable at its $125,000 maturity value.
5. Paid $124,000 cash to acquire its treasury stock.
6. Purchased equipment for $93,000 cash.

Use the above information to determine cash flows from financing activities. (Amounts to be deducted should be indicated with a minus sign.)

3.

MONTGOMERY INC. Comparative Balance Sheets December 31
	Current Year						Prior Year
Assets
Cash		$	58,600					$	59,000
Accounts receivable, net			17,300						21,200
Inventory			155,100						122,500
Total current assets			231,000						202,700
Equipment			85,900						72,500
Accum. depreciation—Equipment			(38,900	)					(26,800	)
Total assets		$	278,000					$	248,400
Liabilities and Equity
Accounts payable		$	41,400					$	44,500
Salaries payable			800						1,000
Total current liabilities			42,200						45,500
Equity
Common stock, no par value			196,200						181,100
Retained earnings			39,600						21,800
Total liabilities and equity		$	278,000					$	248,400

MONTGOMERY INC. Income Statement For Current Year Ended December 31
Sales				$	76,600
Cost of goods sold					(31,800	)
Gross profit					44,800
Operating expenses
Depreciation expense	$	12,100
Other expenses		9,300
Total operating expense					21,400
Income before taxes					23,400
Income tax expense					5,600
Net income				$	17,800

Additional Information on Current-Year Transactions

1. No dividends are declared or paid.
2. Issued additional stock for $15,100 cash.
3. Purchased equipment for cash; no equipment was sold.

1. Use the above information to prepare a statement of cash flows for the current year using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

Answer 1