Financial Accounting: An Integrated Statements Approach, 2nd Edition

Chapter 13 Statement of Cash Flows 607

On the basis of the details of the following bonds payable and related discount accounts, indi-

cate the items to be reported in the financing section of the statement of cash flows, assuming

no gain or loss on retiring the bonds:

BONDS PAYABLE

Jan. 1 Balance 150,000

Jan. 3 Retire bonds 48,000 July 30 Issue bonds 200,000

Dec. 31 Balance 302,000

DISCOUNT ON BONDS PAYABLE

Jan. 1 Balance 12,000 Jan. 3 Retire bonds 4,000

July 30 Issue bonds 15,000 Dec. 31 Amortize discount 1,200

Dec. 31 Balance 21,800

Tiger Golf Inc. reported a net cash flow from operating activities of $105,700 on its statement of

cash flows for the year ended December 31, 2006. The following information was reported in the

cash flows from operating activities section of the statement of cash flows, using the indirect

method:

Decrease in income taxes payable $ 2,100

Decrease in inventories 6,400

Depreciation 11,000

Gain on sale of investments 3,600

Increase in accounts payable 4,700

Increase in prepaid expenses 2,000

Increase in accounts receivable 6,500

Determine the net income reported by Tiger Golf Inc. for the year ended December 31, 2006.

Selected data derived from the income statement and balance sheet of Williams Sonoma, Inc.,

a specialty retailer of kitchen products, for a recent year are as follows:

Income Statement Data (dollars in thousands):

Net earnings $75,096

Depreciation 81,594

Loss on sale of fixed assets 3,950

Other noncash income 7,242

RETAINED EARNINGS

June 30 Stock dividend 143,500 Jan. 1 Balance 1,000,000

Dec. 30 Cash dividend 240,000 Dec. 31 Net income 800,000

Dec. 31 Balance 1,416,500

On the basis of the details of the following fixed asset account, indicate the items to be reported

on the statement of cash flows:

LAND

Jan. 1 Balance 160,000

Feb. 10 Purchased for cash 290,000

Nov. 20 Purchased with long-

term mortgage note 200,000

Dec. 31 Balance 650,000

Exercise 13-14

Reporting land acquisition for
cash and mortgage note on
statement of cash flows

Goal 2

Exercise 13-15

Reporting issuance and
retirement of long-term debt

Goal 2

Exercise 13-16

Determining net income from
net cash flow from operating
activities

Goal 2

Exercise 13-17

Cash flows from operating
activities

Goal 2

(continued)