devry acct312 week 6 homework assignment

Week Six – Homework Exercises E21-14, E21-21and P21-4

E21-14 In preparation
for developing its statement of cash flows for the year ended December 31,
2013, Millennium Solutions, Inc., collected the following information ($ in
millions):

Payment for the early extingushments of
long-term notes
(book value: $50 million)
$54
Sales of common shares 176
Retirement of common shares 122
Loss on sale of equipment 2
Proceeds from safe of equipment 8
Issuance of short-term note payable for cash 10
Acquisition of building for cash 7
Purchase of marketable securities (not a cash equivalent) 5
Purchase of marketable securities (considered a cash
equivalent) 1
Cash payment for 3-year insurance policy 3
Collection of note receivable with interest (principal
amount, $11) 13
Declaration of cash dividends 33
Distribution of cash dividends declared in 2012 30

Required: 1. In Millennium’s statement of cash flows,
what were net cash inflows (or outflows) from investing activities for 2013?
2. In Millennium’s statement of cash flows,
what were net cash inflows (or outflows) from financing activities for 2013?
E21-21 The income
statement and a schedule reconciling cash flows from operating activities to
net income are provided below ($ in 000s) for Peach Computers.

PEACH COMPUTERS Reconciliation
of Net Income
Income Statement To
Net Cash Flows from Operating Activites
For the Year Ended December 31, 2013
Sales $305
Net income $22

Cost of goods sold (185) Adjustments for Noncash
Effects
Gross margin 120 Depreciation expense 11
Salaries expense $41
Loss
on sale of land 5
Insurance expense 19 Changes
in operating assets and liabilities:
Depreciation expense 11 Decrease in accounts receivable 6
Loss on sale of land 5 76 Increase in inventory (13)
Income before tax 44 Decrease in accounts payable (8)
Income tax expense (22) Increase in salaries payable 5
Net income $22
Decrease in prepaid insurance 9
Increase in income tax payable 20
Net cash flows from operating activities $57

Required: 1.
Calculate each of the following amounts for Peach Computers:
a. Cash received from customers during
the reporting period.
b. Cash paid to suppliers of goods during
the reporting period.
c. Cash paid to employees during the
reporting period.
d. Cash paid for insurance during the
reporting period.
e. Cash paid for income taxes during the
reporting period.
2.
Prepare the cash flows from operating activities section of the statement of
cash flows (direct method).
P21-4 The
comparative balance sheets for 2013 and 2012 and the statement of income for
2013 are given below for Dux Company. Additional information from Dux’s
accounting records is provided also.

DUX COMPANY
Comparative Balance Sheets
December 31, 2013 and 2012
($ in 000s)

2013 2012
Assets
Cash $33
$20
Accounts receivable 44 47
Dividends receivable 3 2
Inventory 55 50
Long-term investment 15 10
Land 70 40
Buildings and equipment 225 250
Less:
Accumulated depreciation (25) (50)
$420
$369

Liabilities
Accounts payable $13
$20
Salaries payable 2 5
Interest payable 4 2
Income tax payable 7 8
Notes payable 30 0
Bonds payable 95 70
Less: Discount
on bonds (2) (3)
Shareholders’ Equity
Common stock 210 200
Paid-in capital—excess of par 24 20
Retained earnings 45 47
Less: Treasury
stock (8) 0
$420
$369
Revenues
Sales revenue $200

Dividend revenue 3 $203
Expenses
Cost of goods
sold 120
Salaries expense 25
Depreciation
expense 5
Interest expense 8
Loss on sale of
building 3
Income tax
expense 17 178
Net income $25

Additional information from the accounting records:

a. A building that originally cost $40,000, and which was
three-fourths depreciated, was sold for $7,000.
b. The common stock of Byrd Corporation was purchased for
$5,000 as a long-term investment.
c. Property was acquired by issuing a 13%, seven-year,
$30,000 note payable to the seller.
d. New equipment was purchased for $15,000 cash.
e. On January 1, 2013, bonds were sold at their $25,000 face
value.
f. On January 19, Dux issued a 5% stock dividend (1,000
shares). The market price of the $10 par value common stock was $14 per share
at that time.
g. Cash dividends of $13,000 were paid to shareholders.
h. On November 12, 500 shares of common stock were
repurchased as treasury stock at a cost of $8,000.

Required: Prepare
the statement of cash flows of Dux Company for the year ended December 31,
2013. Present cash flows from operating activities by the direct method. (You
may omit the schedule to reconcile net income to cash flows from operating
activities.)