Module 5 Test - Cash Flow Statement Fall 2011

Golden Eagle Inc. Cash Flow Statement Year Ended December 31, 2011
Operating Activities Cash receipts From customers From interest on LT investment in bonds From sale of trading securities Cash payments To suppliers For operating expenses For purchases of trading securities For income taxes For bond interest For notes payable interest Net cash provided by operating activities Investing Activities Proceeds on sale of vehicle Purchase of vehicle Net cash provided from investing activities Financing Activities Repayment of note payable Payment of cash dividends Net cash used in financing activities Net increase (decrease) in cash Cash December 31, 2010 Cash December 31, 2011

Calculations - also see below

774,900 7,500 20,655 (503,285) (127,025) (45,000) (12,275) (30,000) (5,570)

=746800+107400-79300 or =8385-(120710-119825) $ 803,055

560100+(103100-134250)-92 =124840+(8250-5750)+1193 = 12275-0 =31815-(456275-454460) (723,155) 79,900

65,000 (21,000) 44,000

=74760-9760 Accum dep on vehicle sold = Cost of vehicle sold = 74,760 Cost of vehicle purchased = 8 =125000-77500 =101700-8460-42900+1258

(47,500) (37,755) (85,255) 38,645 14,800 53,445

Golden Eagle Inc. Cash Flow Statement Year Ended December 31, 2011
Operating Activities Loss Adjustments to reconcile loss to net cash provided by operating activities: Depreciation expense Amortization of discount on bond payable Amortization of premium on LT bond investment Loss on sale of vehicle Gain on sale of trading securities Loss on FVA on trading securities Proceeds from sale of trading securities $ (8,460)

$ 35,880 1,815 (885) 9,760 (8,750) 4,430 20,655

=456275-454460 =120710-119825

Payment for purchase of trading securities Decrease in accounts receivable Decrease in inventory Increase in prepaid expenses Increase in accounts payable Increase in accrued expenses payable Decrease in income taxes payable Net cash provided by operating activities

(45,000) 28,100 31,150 (2,500) 25,665 315 (12,275) $

=107400-79300 =134250-103100 =8250-5750 =92790-67125 =12250-11935 88,360 79,900

Calculations

Accounts receivable balance December 31, 2010 Accounts receivable balance December 31, 2011 Sales revenue Calculate cash collected during 2011 for sales. Inventory December 31, 2010 Inventory December 31, 2011 Accounts payable to suppliers December 31, 2010 Accounts payable to suppliers December 31, 2011 Cost of goods sold a. Calculate inventory purchased during 2011. Beg Inv + Purchases - COGS = End Inv b. Calculate the cash payments in 2010 for inventory. Beg AP + Purchases - Payments = End AP Prepaid insurance December 31, 2010 Prepaid insurance December 31, 2011 Operating expenses Accrued liabilities payable, December 31, 2010 Accrued liabilities payable, December 31, 2011 a. Cash payments for operating expenses

$107,400 79,300 746,800 $774,900 $134,250 103,100 67,125 92,790 560,100 $528,950 $503,285 $5,750 8,250 124,840 11,935 12,250 $127,025

Trading securities December 31, 2010 $16,335 Trading securities December 31, 2011 45,000 Loss on fair value adjustment -4,430 Gain on sale of trading securities 8,750 Cash proceeds on trading securities sold 20,655 a. Calculate the carrying value on the trading securities sold. $11,905 Cash - CV = Gain; 20,655 - CV = 8,750

b. Calculate the cash paid for the trading securities purchased during 2011. Beg. TS + Purchases - CV of TS Sold -Loss on FVA = Ending TS Income taxes payable December 31, 2010 Income payable December 31, 2011 Income tax expense a. Calculate the income taxes paid during 2011. 12,275 + 0 - x = 0 b. Calculate the difference between the expense reported and income taxes paid in 2010.

$45,000

$12,275 0 0 $12,275

$12,275

Property, Plant & Equipment December 31, 2010 $929,000 Property, Plant & Equipment December 31, 2011 865,000 Accumulated depreciation December 31, 2010 297,280 Accumulated depreciation December 31, 2011 322,920 Cost of property, plant & equipment purchased 21,000 Cost of property, plant & equipment sold 85,000 Depreciation expense 35,880 Loss on equipment sold -9,760 a. Calculate the accumulated depreciation on the PP&E sold. Beg Accum Dep + Dep exp - Accum dep on PPE sold = $10,240 End Accum Dep b. Calculate the cash proceeds on the equipment sold. Cash - Carrying Value = Loss $65,000 Bonds payable December 31, 2010 Bonds payable December 31, 2011 Bond interest expense a. Were the bonds sold at a premium or a discount? Discount. Amortized cost is increasing over time. b. Calculate the interest paid during 2011. Interest expense Bonds Payable Cash Note payable, December 31, 2010 Note payable, December 31, 2011 Note payable issued to purchase equipment Note payable paid during the year Beg. NP + NP issued - NP paid = End NP $454,460 456,275 31,815

31,815
1,815 30,000

$125,000 77,500 0 $47,500

Retained earnings, December 31, 2010 Retained earnings, December 31, 2011 Profit Dividends payable, December 31, 2010 Dividends payable, December 31, 2011 Calculate the dividends declared during 2011. Beg RE + Profit - Dividends Declared = End RE Calculate the dividends paid during 2011. Beg Div Payable + Dividends Declared - Dividends Paid = End Div Payable

$101,700 42,900 -8,460 $12,585 25,170 $50,340

$37,755

Calculations - also see below:

=746800+107400-79300 or 746800+28100 =8385-(120710-119825)

560100+(103100-134250)-92790+67125 =124840+(8250-5750)+11935-12250

=31815-(456275-454460)

=74760-9760 Accum dep on vehicle sold = 297,280+35,880-322,920=10,240 Cost of vehicle sold = 74,760+10,240=85,000 Cost of vehicle purchased = 865,000+85,000-929,000=21,000 =125000-77500 =101700-8460-42900+12585-25170 =50340-12585

$53,445 $

=456275-454460 =120710-119825

=107400-79300 =134250-103100 =8250-5750 =92790-67125 =12250-11935 79,900 $ -