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Bluebird Corporation uses the direct method to prepare its statement of cash flows. The following comparative...

Bluebird Corporation uses the direct method to prepare its statement of cash flows. The following comparative balance sheet data (in millions) were available for Bluebird at December 31:
Bluebird Corporation
Comparative Balance Sheets
December 31
​ 2017​ 2016
​Cash​ ​$ 7,994 ​ ​$ 4,802
​Accounts Receivable​ 3,791​ ​ 3,173
​Less: Allowance for Uncollectible Accounts (68) (57)
​Inventory​ 4,293​ ​ ​ 2,004
​Prepaid Insurance​ 104​ ​ 111
​Plant and Equipment​ 13,396​ 11,792
​Less: Accumulated Depreciation (5,775)​ (4,321)
​Total Assets​ $23,735​ $17,504
​Accounts Payable (all pertaining to inventory) $ 1,358 $ 1,210
​Income Taxes Payable 985 801
​Bonds Payable​ 4,500​ ​ ​ 3,000
​Premium on Bonds Payable​ 20​ ​ ​ 0
​Common Stock ​ 2,900​ ​ 2,900
​Retained Earnings​ 13,972​ ​ 9,593
​ Total liabilities and
​ Stockholders’ equity​ $23,735​ ​$17,504
The following additional data are assumed to be from either the 2017 income statement or the notes to the financial statements:
​Cash paid for dividends in 2017​$ 778
​Cash paid for plant and equipment purchased during 2017​ 2,061​
​Gain on sale of plant and equipment sold during 2017​ 40​
​Depreciation expense for 2017​ 1,888
​Income tax expense for 2017 ​ ​ 2,217
​Cash collected on accounts receivable during 2017​ 20,097
​Cost of Goods Sold for 2017​ 13,294
​Interest Expense for 2017​ 285​
​Amortization of Premium on Bonds Payable in 2017​ 5
​Cash paid for insurance in 2017​ 196
​Credit sales for 2017​ 20,847
Additional assumptions: 1. All inventory is purchased on account.
​ 2. No bonds payable were retired during the year.
Using the above information, compute the amounts requested below.
​
1. What was insurance expense for 2017? (3 points)​______________
2. What was net income for 2017? (3points) ​______________
3. What was uncollectible accounts expense for 2017? (5 points)​______________
4. How much cash was received from the sale of plant and equipment during 2017?​
​ ________________
​ (5 points)
5. How much cash was paid for income taxes in 2017? (3 points) ​______________
6. How much cash was paid for interest during 2017? (3 points) ​_____________​
7. How much cash was paid for inventory in 2017? (6 points)​______________
Present Value of a Single Amount
n
4%
5%
6%
7%
8%
10%
12%
14%
16%
1
.962
.952
.943
.935
.926
.909
.893
.877
.862
2
.925
.907
.890
.873
.857
.826
.797
.769
.743
3
.889
.864
.840
.816
.794
.751
.712
.675
.641
4
.855
.823
.792
.763
.735
.683
.636
.592
.552
5
.822
.784
.747
.713
.681
.621
.567
.519
.476
6
.790
.746
.705
.666
.630
.564
.507
.456
.410
7
.760
.711
.665
.623
.583
.513
.452
.400
.354
8
.731
.677
.627
.582
.540
.467
.404
.351
.305
9
.703
.645
.592
.544
.500
.424
.361
.308
.263
10
.676
.614
.558
.508
.463
.386
.322
.270
.227
11
.650
.585
.527
.475
.429
.350
.287
.237
.195
12
.625
.557
.497
.444
.397
.319
.257
.208
.168
13
.601
.530
.469
.415
.368
.290
.229
.182
.145
14
.577
.505
.442
.388
.340
.263
.205
.160
.125
15
.555
.481
.417
.362
.315
.239
.183
.140
.108
16
.534
.458
.394
.339
.292
.218
.163
.123
.093
17
.513
.436
.371
.317
.270
.198
.146
.108
.080
18
.494
.416
.350
.296
.250
.180
.130
.095
.069
19
.475
.396
.331
.277
.232
.164
.116
.083
.060
20
.456
.377
.312
.258
.215
.149
.104
.073
.051
Present Value of an Annuity
n
4%
5%
6%
7%
8%
10%
12%
14%
16%
1
.962
.952
.943
.935
.926
.909
.893
.877
.862
2
1.886
1.859
1.833
1.808
1.783
1.736
1.690
1.647
1.605
3
2.775
2.723
2.673
2.624
2.577
2.487
2.402
2.322
2.246
4
3.630
3.546
3.465
3.387
3.312
3.170
3.037
2.914
2.798
5
4.452
4.329
4.212
4.100
3.993
3.791
3.605
3.433
3.274
6
5.242
5.076
4.917
4.767
4.623
4.355
4.111
3.889
3.685
7
6.002
5.786
5.582
5.389
5.206
4.868
4.564
4.288
4.039
8
6.733
6.463
6.210
5.971
5.747
5.335
4.968
4.639
4.344
9
7.435
7.108
6.802
6.515
6.247
5.759
5.328
4.946
4.607
10
8.111
7.722
7.360
7.024
6.710
6.145
5.650
5.216
4.833
11
8.760
8.306
7.887
7.499
7.139
6.495
5.938
5.453
5.029
12
9.385
8.863
8.384
7.943
7.536
6.814
6.194
5.660
5.197
13
9.986
9.394
8.853
8.358
7.904
7.103
6.424
5.842
5.342
14
10.563
9.899
9.295
8.745
8.244
7.367
6.628
6.002
5.468
15
11.118
10.380
9.712
9.108
8.559
7.606
6.811
6.142
5.575
16
11.652
10.838
10.106
9.447
8.851
7.824
6.974
6.265
5.669
17
12.166
11.274
10.477
9.763
9.122
8.022
7.120
6.373
5.749
18
12.659
11.690
10.828
10.059
9.372
8.201
7.250
6.467
5.818
19
13.134
12.085
11.158
10.336
9.604
8.365
7.366
6.550
5.877
20
13.590
12.462
11.470
10.594
9.818
8.514
7.469
6.623
5.929
14

Solutions

Expert Solution

1. Cash paid for insurance in 2017 : $ 203 million

2. Net Income for 2017 : $ 5,157 million

3. Uncollectible account expense for 2017 : $ 143 million

4. Cash received from sale of plant and equipment during 2017 : $ 63 million

5. Cash paid for income taxes in 2017 : $ 2,033 million.

6. Cash paid for interest during 2017 : $ 290 million.

7. Cash paid for inventory in 2017 : $ 15,435 million

Retained Earnings:

Dividends 778 Beg. bal. 9,593
Net Income 5,157
End. bal. 13,972

Plant and Equipment:

Beg. bal. 11,792 Asset Disposal 457
Cash 2,061
End. bal. 13,396

Accumulated Depreciation : Plant and Equipment

Asset Disposal 434 Beg. bal. 4,321
Depreciation Expense 1,888
End. bal. 5,775

Accounts Receivable:

Beg. bal. 3,173 Cash 20,097
Credit Sales 20,847 Allowance for Doubtful Accounts 132
End. bal. 3,791

Allowance for Uncollectible Accounts:

Accounts Receivable 132 Beg. bal. 57
Uncollectible Accounts Expense 143
End. bal. 68

ekkarill92 answered 1 year ago
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