Case A:

 Compute cash received from customers:

 Sales

$

510,000  

 Accounts receivable, December 31, 2011

25,200  

 Accounts receivable, December 31, 2012

34,800  

 Case B:

 Compute cash paid for rent:

 Rent expense

$

140,800  

 Rent payable, December 31, 2011

8,800  

 Rent payable, December 31, 2012

7,200  

 Case C:

 Compute cash paid for merchandise:

 Cost of goods sold

$

528,000  

 Merchandise inventory, December 31, 2011

159,600  

 Accounts payable, December 31, 2011

67,800  

 Merchandise inventory, December 31, 2012

131,400  

 Accounts payable, December 31, 2012

84,000  

For each of the above three separate cases, use the information provided about the calendar-year 2012 operations of Sahim Company to compute the required cash flow information. (Omit the “$” sign in your response.)

  Case A:

 Cash received from customers

  Case B:

 Cash paid for rent

  Case C:

 Cash paid for merchandise

BEKHAM COMPANY
Income Statement
For Year Ended December 31, 2011

  Sales

$

1,818,000

  Cost of goods sold

891,000

  Gross profit

927,000

  Operating expenses

      Salaries expense

$

248,535

      Depreciation expense

43,200

      Rent expense

48,600

      Amortization expenses–Patents

5,400

      Utilities expense

19,125

 364,860

562,140

  Gain on sale of equipment

7,200

  Net income

$

569,340

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

  Accounts receivable

$

40,500

  increase

  Accounts payable

$

13,500 

 decrease

  Merchandise inventory

27,000

  increase

  Salaries payable

4,500  

 decrease

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. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response)

BEKHAM COMPANY
Income Statement
For Year Ended December 31, 2011

  Sales

$

1,818,000

  Cost of goods sold

891,000

  Gross profit

927,000

  Operating expenses

      Salaries expense

$

248,535

      Depreciation expense

43,200

      Rent expense

48,600

      Amortization expenses—Patents

5,400

      Utilities expense

19,125

 364,860

562,140

  Gain on sale of equipment

7,200

  Net income

$

569,340

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

  Accounts receivable

$

40,500

  increase

  Accounts payable

$

13,500 

 decrease

  Merchandise inventory

27,000

  increase

  Salaries payable

4,500 

 decrease

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. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

Use the following financial statements and additional information.

GECKO INC.
Comparative Balance Sheets
June 30, 2011 and 2010

2011

2010

  Assets

  Cash

$

85,800

$

45,000

  Accounts receivable, net

70,000

52,000

  Inventory

66,800

96,800

  Prepaid expenses

5,400

5,200

  Equipment

130,000

120,000

  Accum. depreciation—Equipment

(28,000

)

(10,000

)

  Total assets

$

330,000

$

309,000

  Liabilities and Equity

  Accounts payable

$

26,000

$

32,000

  Wages payable

7,000

16,000

  Income taxes payable

2,400

3,600

  Notes payable (long term)

40,000

70,000

  Common stock, $5 par value

230,000

180,000

  Retained earnings

24,600

7,400

  Total liabilities and equity

$

330,000

$

309,000

GECKO INC.
Income Statement
For Year Ended June 30, 2011

  Sales

$

668,000  

  Cost of goods sold

412,000  

  Gross profit

256,000  

  Operating expenses

       Depreciation expense

$

58,600  

       Other expenses

67,000  

  Total operating expenses

125,600  

130,400  

  Other gains (losses)

       Gain on sale of equipment

2,000  

  Income before taxes

132,400  

  Income taxes expense

45,640  

  Net income

$

86,760  

a.

A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.

b.

The only changes affecting retained earnings are net income and cash dividends paid.

c.

New equipment is acquired for $58,600 cash.

d.

Received cash for the sale of equipment that had cost $48,600, yielding a $2,000 gain.

e.

Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.

f.

All purchases and sales of merchandise inventory are on credit.

(1)

Prepare a statement of cash flows for the year ended June 30, 2011, using the indirect method.(Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

(2)

Compute the company’s cash flow on total assets ratio for its fiscal year 2011. (Round your answer to 1 decimal place. Omit the “%” sign in your response.)

  Cash flow on total assets ratio

The following summarized Cash T-account reflects the total debits and total credits to the Cash account of Texas Corporation for calendar year 2011.

  Balance, Dec. 31, 2010

135,200  

  Receipts from customers

6,000,000  

  Payments for merchandise

1,590,000  

  Receipts from dividends

208,400  

  Payments for wages

550,000  

  Receipts from land sale

220,000  

  Payments for rent

320,000  

  Receipts from machinery sale

710,000  

  Payments for interest

218,000  

  Receipts from issuing stock

1,540,000  

  Payments for taxes

450,000  

  Receipts from borrowing

2,600,000  

  Payments for machinery

2,236,000  

  Payments for long-term investments

2,260,000  

  Payments for note payable

386,000  

  Payments for dividends

500,000  

  Payments for treasury stock

218,000  

Balance, Dec. 31, 2011

$

?  

(1)

Use this information to prepare a complete statement of cash flows for year 2011. The cash provided or used by operating activities should be reported using the direct method. (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

(2)

Refer to the statement of cash flows in part 1 to answer the following questions a through d:

a.

(i) Which section shows the largest cash inflow?

(ii) Which section shows the largest cash outflow?

b.

What is the largest individual item among the investing cash outflows?

c.

The cash proceeds are larger from

d.

From borrowing activities the company has