Corporate Reporting and Financial Analysis
Prof Wang Jiwei
HOMEWORK #1 Suggested Solution
Question 1 Statement of Cash Flows
Requirement 1:
Operating activities
Collections 426 - 40 = 386
Payments to suppliers -310 - 23 + 10 = -323
General expenses -30 - 4 = -34
Wages -42 - 6 = -48
Interest -11
Tax -8 + 2 = -6
Net cash used in operating activities -36
Investing activities
Sale of marketable securities 95 + 12 = 107
Purchases of fixed assets -228 + 165 - 15 - 24 = -102
Sale of fixed assets 15 - 3 = 12
Net cash provided by investing activities 17
Financing activities
Proceeds from long term debt (180 + 12) - 183 = 9
Repayment of long term debt -10
Proceeds from issuance of common stock 163 - 150 = 13
Dividend paid 4 - (26 + 10 - 30) = -2
Net cash provided by financing activities 10
Net decrease in cash -9
Cash at the beginning of the period 54
Cash at the end of the period 45
Supplemental information:
Fixed assets acquired under capital lease 50
Dividend declared and not paid 4
Requirement 2:
Indirect
Net income 10
Depreciation 24
Gain on sale of short term investment -12
Loss on sale of fixed assets 3
25
Increase in A/R -40
Increase in inventory -23
Increase in prepaid expenses -4
Increase in A/P 10
Decrease in wages payable -6
Increase in tax payable 2
-36
Question 2 Accounting for Bonds
English: A receipt issued for purchase of temporar...
Southtown (P.O.D. song)
Payable on Death Live0.377 * 1,000,000 + 12.462 * 40,000 = 875,480
2) DR: Cash 875,480
Discount on Bonds Payable 124,520
CR: Bonds Payable 1,000,000
Issued bonds at a discount
June 30, 2013
DR: Interest Expense 43,774
CR: Cash 40,000
Discount on Bonds Payable 3,774
Paid interest and amortized discount
December 31, 2013
DR: Interest...