Intermediateaccountingsolutionofc.docVIP

Chapter 21 - Statement of Cash Flows Revisited Chapter 21 - Statement of Cash Flows Revisited 21- PAGE 2 21- PAGE 44 Chapter 21 Statement of Cash Flows Revisited EXERCISES Exercise 21-1 Example F 1. Sale of common stock I 2. Sale of land F 3. Purchase of treasury stock O 4. Merchandise sales F 5. Issuance of a long-term note payable O 6. Purchase of merchandise F 7. Repayment of note payable O 8. Employee salaries I 9. Sale of equipment at a gain F 10. Issuance of bonds I 11. Acquisition of bonds of another corporation O 12. Payment of semiannual interest on bonds payable F 13. Payment of a cash dividend I 14. Purchase of building I 15. Collection of nontrade note receivable (principal amount) I 16. Loan to another firm F 17. Retirement of common stock O 18. Income taxes F 19. Issuance of a short-term note payable I 20. Sale of a copyright Exercise 21-2 Requirement 1 ($ in millions) Inventory Beginning balance 90 Goods purchased 303 300 Cost of goods sold Ending balance 93 Accounts Payable 14 Beginning balance Cash paid 301 303 Goods purchased 16 Ending balance Requirement 2 Summary Entry ($ in millions) Cost of goods sold 300 Inventory 3 Accounts payable 2 Cash (paid to suppliers of goods) 301 Exercise 21-3 ($ in millions) Situation Sales Accounts Bad debt Allowance for Cash received revenue receivable expense uncollectible from accounts customers increase increase (decrease) (decrease) 1 100 -0- -0- -0- 100 1. Summary Entry Cash (received from customers) 100 Sales revenue 100 2 100 5 -0- -0- 95 2. Summary Entry Cash (received from customers) 95 Accounts receivable 5 Sales revenue 100 3 100 (5) -0- -0- 105 3. Summary Entry Cash (received from customers) 105 Accounts receivable 5 Sales revenue 100 4 100 5 2 2 95 4.