Sesi 11 & 12 Shared

The following selected account balances relate to the plant asset accounts of Raji
Ltd. at year-end.
2017 2016 Increase / Decrease
Accumulated depreciation—buildings € 337,500 € 300,000 € 37,500
Accumulated depreciation—equipment 145,000 93,000 € 52,000
Buildings 750,000 750,000 €0
Depreciation expense 101,500 85,500 € 16,000
Equipment 300,000 250,000 € 50,000
Land 100,000 70,000 € 30,000
Loss on disposal of plant assets 7,000 0 € 7,000
Additional information:
1. Raji purchased €90,000 of equipment and €30,000 of land for cash in 2017
2. Raji also sold equipment in 2017.
3. Depreciation expense in 2017 was €37,500 on building and €64,000 on equipment
Instructions
(a) Determine the amounts of any cash inflows or outflows related to the plant asset accounts in 2017. Equipment
Amount Cash inflow/ outflow Dr Cr
Purchase of equipment 90,000 Cash outflow 1/1/2017 250,000 checked 300,000
Purchase of land 30,000 Cash outflow Purchase 90,000
Proceeds from equipment sold 40,000 Cash inflow Sold 40,000
31/12/201 300,000
Accumulated Depreciation of Sold Equipment 12,000 Accumulated Depr Equipment

Dr Cr Depre Exp 64000
1/1/2017 93,000 Acc Depr 64000
Current year 64,000
Sold 12,000
31/12/2017 145,000
(b) Indicate where each of the cash inflows or outflows identified in (a) would be classified on the statement of cash flows.
Operating/investing/financing
Purchase of equipment Investing
Purchase of land Investing
Proceeds from equipment sold Investing
The income statement of Asquith Company SA is presented below.
1. Accounts receivable decreased €230,000 during the year, and inventory increased €120,000. AR decrease 230,000
2. Prepaid expenses increased €125,000 during the year. Inventory increase 120,000
3. Accounts payable to merchandise suppliers increased €50,000 during thes Prepaid Expenincrease 125,000
4. Accrued expenses payable increased €155,000 during the year. AP increase 50,000
Accrued Payabincrease 155,000
ASQUITH COMPANY SA
Income Statement
For the Year Ended December 31, 2017
Service revenue € 5,250,000

Cost of goods sold
Beginning inventory € 1,780,000
Purchases 3,430,000
Ending inventory 1,900,000
Total cost of goods sold € 3,310,000
Gross profit € 1,940,000
Operating expenses
Depreciation expense 95,000
Amortization expense 20,000
Other expenses 945,000
Total Operating expenses 1,060,000
Net Income € 880,000
Prepare the operating activities section of the statement of cash fl ows for the year ended December 31, 2017, for Asquith Company, using the indirect method
ASQUITH COMPANY SA
Partial Statement of Cash Flows
Cash flows from operating activities

Net income € 880,000
Adjustments to reconcile net income to net cash provided by operating activities
+ Depreciation expense 95,000
+ Amortization expense 20,000
+ Decrease in accounts receivable 230,000
- Increase in inventory (120,000)
- Increase in prepaid expenses (125,000)
+ Increase in accounts payable 50,000
+ Increase in accrued expenses payable 155,000 305,000
Net cash provided by operating activities € 1,185,000
The income statement of Asquith Company SA is presented below.
1. Accounts receivable decreased €230,000 during the year, and inventory increased €120,000.
2. Prepaid expenses increased €125,000 during the year.
3. Accounts payable to merchandise suppliers increased €50,000 during the year.
4. Accrued expenses payable increased €155,000 during the year.
ASQUITH COMPANY SA
Income Statement
Service revenue 5,250,000

Cost of goods sold
Beginning inventory € 1,780,000
Purchases 3,430,000
Ending inventory 1,900,000
Total cost of goods sold 3,310,000
Gross profit 1,940,000
Operating expenses
Amortization expense 20,000
Other expenses 945,000
Total Operating expenses 1,060,000
Net Income 880,000
method.
ASQUITH COMPANY SA

Cash receipts from customers
Service revenue 5,250,000
Add : Decrease in AR 230,000 5,480,000
Less cash payments:

To suppliers
Cost of goods sold 3,310,000
Add: Increase in inventory 120,000
Deduct: Increase in accounts payable (50,000) 3,380,000
Cash payments for operating expenses

Operating expenses 945,000
Add: Increase in prepaid expenses 125,000
Deduct : Increase in accrued payable (155,000) 915,000
Net cash provided by operating activities
1,185,000
AR decrease 230,000
Inventory increase 120,000
Prepaid E increase 125,000
AP increase 50,000
Accrued P increase 155,000
The income statement of Anne Droid Co. Ltd. reported the following condensed
information.
ANNE DROID CO. LTD.
Income Statement
Service revenue 551,000

Income tax expense 36,000
Net income 115,000
Anne Droid’s statement of fi nancial position contained these comparative data at December 31
2017 2016 Increase / Decrease

Accounts receivable 55,000 70,000 (15,000)
Accounts payable 40,000 51,000 (11,000)
Income taxes payable 12000 4,000 8,000
Anne Droid has no depreciable assets. Accounts payable pertain to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash fl ows using the indirect method.
ANNE DROID CO. LTD.


Net income 115,000
Decrease in accounts receivable 15,000
Decrease in accounts payable (11,000)
Increase in income taxes payable 8,000
Net cash provided by operating activities 127,000
Increase / Decrease
Decrease
Decrease
Increase
The income statement of Anne Droid Co. Ltd. reported the following condensed
information.
ANNE DROID CO. LTD.
Income Statement

Net income 115,000
Anne Droid’s statement of fi nancial position contained these comparative data at December 31
2017 2016
Accounts receivable 55,000 70,000
Accounts payable 40,000 51,000
Income taxes payable 12,000 4,000
Anne Droid has no depreciable assets. Accounts payable pertain to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash fl ows using the direct method
ANNE DROID CO. LTD.


Add : Decrease in AR 15,000 566,000
Less cash payments:

Cash payments for operating expenses
Add: Decrease in accounts payable 11,000 411,000
For income tax expenses

Income tax expenses 36,000
Deduct : Increase income taxes payable (8,000) 28,000
127,000
Increase / Decrease
(15,000) Decrease
(11,000) Decrease
8,000 Increase
Presented below are the fi nancial statements of Rocastle plc.
ROCASTLE plc
Comparative Statements of Financial Position
December 31
s
Assets 2017 2016
Equipment 70,000 78,000 Investing
Accumulated depreciation - equipment (27,000) (24,000) Operating
Inventory 45,000 25,000 Operating
Accounts receivable 25,000 14,000 Operating
Cash 18,000 33,000 to be checked
Total 131,000 126,000
Equity and Liabilities

Share capital—ordinary 25,000 25,000 Financing
Retained earnings 31,000 28,000 Financing
Bonds payable 20,000 10,000 Financing
Accounts payable 31,000 43,000 Operating
Income taxes payable 24,000 20,000 Operating
Total 131,000 126,000
ROCASTLE plc
Income Statement
Sales revenue 286,000

Cost of goods sold 204,000 Suppliers
Gross profit 82,000
Operating expenses 37,000 Operating expenses
Income from operations 45,000
Interest expense 7,000 Interest expense
Income before income taxes 38,000
Income tax expense 10,000 Income tax expense
Net income 28,000
Additional data:
1. Depreciation expense w as €6,000.
2. Dividends of €25,000 were declared and paid.
3. During the year, equipment was sold for €12,000 cash. This equipment cost €15,000
originally and had accumulated depreciation of €3,000 at the time of sale.
4. Additional equipment was purchased for €7,000 cash
Instructions
(a) Prepare a statement of cash fl ows using the indirect method
ROCASTLE plc
Statement of Cash Flow

Net income
Depreciation expense
Increase in accounts receivable
Increase in inventory
Decrease in accounts payable
Increase
Net cash in incomeby
provided taxes payableactivities
operating
Cash flows from investing activities

Sale of equipment 12,000
Purchase of equipment
Net cash provided by investing activities (7,000)
Cash flows from financing activities

Issuance of bonds 10,000
Payment
Net of cash dividends
cash provided by financing activities (25,000)
Net decrease in cash

Cash at beginning of period
Cash at end of period
(b) Compute free cash flow.

less : Capital expenditures

less : Cash Dividend
n
Asset
Non Current Asset (
Increase/Decrease Equipment Current Asset
(8,000) Decrease Dr Cr
(3,000) Decrease 1/1/2017 78,000 70,000 Liabilites
20,000 Increase sale 15000 Non Current Liabiliti
11,000 Increase purchase 7,000 Current Liabilities
(15,000) Decrease 31/12/201 70,000
Equity
-
3,000 Increase
10,000 Increase
(12,000) Decrease
4,000 Increase
28,000
6000
(11,000)
(20,000)
(12,000)
4,000
(5,000) Equipment
Dr Cr
1/1/2017 78,000
2017 15000
2017 7,000
5,000 31/12/2017 70,000
(15,000)
(15,000)
33,000
18,000
(5,000)
(7,000)
(25,000)
(37,000)
How to categorize?
Opr/Inv/Fin
Investing
Operating
Financing
Operating
Financing
Presented below are the fi nancial statements of Rocastle plc.
ROCASTLE plc
December 31
Assets 2017 2016 Increase/Decrease

Equipment 70,000 78,000 (8,000) Decrease
Accumulated depreciation - equipment (27,000) (24,000) (3,000) Decrease
Inventory 45,000 25,000 20,000 Increase
Accounts receivable 25,000 14,000 11,000 Increase
Cash 18,000 33,000 (15,000) Decrease
Total 131,000 126,000

Share capital—ordinary 25,000 25,000 -
Retained earnings 31,000 28,000 3,000 Increase
Bonds payable 20,000 10,000 10,000 Increase
Accounts payable 31,000 43,000 (12,000) Decrease
Income taxes payable 24,000 20,000 4,000 Increase
Total 131,000 126,000
ROCASTLE plc
Income Statement
Sales revenue 286,000 Cash Inflow

Cost of goods sold 204,000 Cash Outflow
Gross profit 82,000
Operating expenses 37,000 Cash Outflow
Income from operations 45,000
Interest expense 7,000 Cash Outflow
Income before income taxes 38,000
Income tax expense 10,000 Cash Outflow
Net income 28,000
Additional data:
1. Depreciation expense w as €6,000.
2. Dividends of €25,000 were declared and paid.
3. During the year, equipment was sold for €12,000 cash. This equipment cost €15,000
originally and had accumulated depreciation of €3,000 at the time of sale.
4. Additional equipment was purchased for €7,000 cash
5 Accounts payable pertains to merchandise creditors.
6. All operating expenses except for depreciation are paid in cash.
7. All depreciation expense is in the operating expenses.
8. All sales and purchases are on account.
Instructions
(a) Prepare a statement of cash fl ows using the direct method.
ROCASTLE plc
Statement of Cash Flows

Less : Increase in AR (11,000) 275,000
Less cash payments:

To Suppliers
Cost of goods sold 204,000
Add: Increase in inventory 20,000
Add: Decrease in accounts payable 12,000 236,000
For Operating Expenses

less : Depreciation Expenses (6,000)
31,000
For interest expenses
Interest expenses 7,000 7,000

Income tax expenses 10,000
Deduct : Increase income taxes payable (4,000) 6,000
(5,000)
Cash flows from investing activities --> sama dengan indire

Sale of equipment
Purchase
Net of equipment
cash provided by investing activities

Issuance of bonds
Payment
Net of cash dividends
cash provided by financing activities
Net decrease in cash

Cash at beginning of period
Cash at end of period
(b) Compute free cash flow.

--> sama dengan indire
less : Capital expenditures -
less : Cash Dividend -
-
--> sama dengan indirect method, lihat soal no7
--> sama dengan indirect metho, lihat soal no. 7
Condensed financial data of Keller Minden Company SE are shown below.
KELLER MINDEN COMPANY SE

December 31

Equipment 318,000 205,000 113,000
Accumulated depreciation - equipment (44,000) (40,000) (4,000)
Investment 79,500 107,000 (27,500)
Inventory 124,500 102,650 21,850
Accounts receivable 63,200 37,000 26,200
Cash 93,600 33,400 60,200
Total 634,800 445,050

Share capital—ordinary 250,000 200,000 50,000
Retained earnings 173,100 107,940 65,160
Bonds payable 140,000 70,000 70,000
Accounts payable 56,600 48,280 8,320
Accrued expenses payable 15,100 18,830 (3,730)
Total 634,800 445,050

Income Statement

COGS 99,460 0
Operating expenses, excluding depr expense 19,670 0.0661176
Depr expense 25,000
Loss on disposal of plant assets 5,000
Interest expense 2,940
Net Income 108,160
1. New equipment costing €149,000 was purchased for cash during the year.
2. Investments were sold at cost
3. Equipment costing €36,000 was sold for €10,000, resulting in a loss of €5,000.
4. Further
5. A cash dividend
analysisof €43,000 was declared and paid during the year.
reveals that accounts payable pertain to merchandise creditors.
Instructions
Prepare a statement of cash fl ows using the indirect method


Net income 108,160
Loss on disposal of plant assets 5,000
Increase in accounts receivable (26,200)
Increase in inventory (21,850)
Increase in accounts payable 8,320
Decrease in accrued expenses payanble
Net cash provided by operating activities (3,730) (13,460)
94,700

Sale of investments 27,500
(111,500)

Issuance of bonds 70,000
Sale of ordinary shares 50,000
Payment of cash dividends
Net cash provided by financing activities (43,000)
77,000
Net decrease in cash 60,200

Cash at beginning of period 33,400
Cash at end of period 93,600
ncrease/Decrease
Prepare a statement of cash fl ows using direct method


Sales revenue
Less : Increase in AR
Less cash payments:

To Suppliers
Cost of goods sold
Add: Increase in inventory
Less: increase in accounts payable
For Operating Expenses

Operating expenses
Add : decrease in accrued expenses payable
For interest expenses

Interest expenses

Income tax
Net cash provided expenses activities
by operating
Investing & Financing sama dengan indirect method

direct method
COMPANY SE
ash Flow
cember 31, 2017
297,500
(26,200) 271,300
99,460
21,850
(8,320) 112,990
19,670
3,730
23,400
2,940
37,270
94,700
Presented below are the comparative statements of fi nancial position for Vernet
Company Ltd. at December 31.
KVERNET COMPANY LTD

December 31

Land 140,000 150,000 (10,000)
Equipment 215,000 175,000 40,000
Accumulated depreciation - equipment (70,000) (42,000) (28,000)
Building 250,000 250,000 -
Accumulated depreciation - building (70,000) (50,000) (20,000)
Prepaid expenses 12,140 16,540 (4,400)
Inventory 170,000 140,000 30,000
Accounts receivable 77,000 64,000 13,000
Cash 41,460 57,000 (15,540)
Total 765,600 760,540

Share capital—ordinary, £1 par 275,000 250,000 25,000
Retained earnings 187,600 200,540 (12,940)
Bonds payable 265,000 265,000 -
Accounts payable 38,000 45,000 (7,000)
Total 765,600 760,540
1. Operating expenses include depreciation expense £57,000 and charges from prepaid expenses of £4,400.
2. Land was sold for cash at cost for £35,000
3. Cash dividends of £82,940 were paid
4. Net income for 2017 was £70,000.
5. Equipment was purchased for £80,000 cash. In addition, equipment costing £40,000 with a book value of £31,000 was sold
6 Issued 25,000 ordinary shares with a £1 par value for land with a fair value of £25,000.
Instructions
Prepare a statement of cash flows for 2017 using the indirect method.
KVERNET COMPANY LTD


Net income 70,000
gain on disposal of plant assets (3,000)
Increase in accounts receivable (13,000)
Increase in inventory (30,000)
Decrease in prepaid expenses 4,400
Decrease in accounts
Net cash provided by payable
operating activities (7,000) 8,400
78,400

Sale of land 35,000
(11,000)

Payment of cash dividends
Net cash provided by financing activities (82,940)
(82,940)
Net decrease in cash (15,540)

Cash at beginning of period 57,000
Cash at end of period 41,460
Non Cash Activity

Issued 25,000 ordinary shares with a £1 par value for land with a fair value of £25,000.
Increase/Decrease
s of £4,400.
ook value of £31,000 was sold for £34,000 cash.
Cost 40,000
Acc Der 9,000
BV 31,000
Sales price 34,000
Gain on salSales price - BV
3,000

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The following selected account balances relate to the plant asset accounts of Raji

Accumulated Depreciation of Sold Equipment 12,000 Accumulated Depr Equipment

Service revenue € 5,250,000

Cash flows from operating activities

Service revenue 5,250,000

Cash flows from operating activities

Less cash payments:

Cash payments for operating expenses

Service revenue 551,000

2017 2016 Increase / Decrease

ANNE DROID CO. LTD.

Cash flows from operating activities

Service revenue 551,000

ANNE DROID CO. LTD.

Cash flows from operating activities

Less cash payments:

For income tax expenses

Equity and Liabilities

Sales revenue 286,000

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net decrease in cash

(b) Compute free cash flow.

less : Capital expenditures

Assets 2017 2016 Increase/Decrease

Equity and Liabilities

Sales revenue 286,000 Cash Inflow

Cash flows from operating activities

Less cash payments:

For Operating Expenses

For income tax expenses

Cash flows from investing activities --> sama dengan indire

Cash flows from financing activities

Net decrease in cash

(b) Compute free cash flow.

KELLER MINDEN COMPANY SE

Assets 2017 2016 Increase/Decrease

Equity and Liabilities

KELLER MINDEN COMPANY SE

Sales revenue 297,500

KELLER MINDEN COMPANY SE

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net decrease in cash 60,200

Prepare a statement of cash fl ows using direct method

Cash flows from operating activities

Less cash payments:

For Operating Expenses

For interest expenses

For income tax expenses

Investing & Financing sama dengan indirect method

KVERNET COMPANY LTD

Assets 2017 2016 Increase/Decrease

Equity and Liabilities

KVERNET COMPANY LTD

Cash flows from operating activities

Cash flows from investing activities

Cash flows from financing activities

Net decrease in cash (15,540)

Non Cash Activity