Student Name:

Class:
Problem 14-8
1. and 2.
Calculation of depreciation to add back to Net Income:
Accumulated Depreciation, beginning balance
Accumulated Depreciation, ending balance
Debits to Accumulated Depreciation
Credits to Accumulated Depreciation

$
$
$
$

70
85
10
25

Correct!
Correct!
Correct!
Correct!

Changes in noncash balance sheet accounts that impact net income:

Current Assets
Accounts receivable
Inventory
Prepaid expenses
Current Liabilities
Accounts Payable
Accrued liabilities
Income taxes payable

Increase in
Account
Balance
(80)

Decrease in
Account
Balance
Correct!
35

(2)

Correct!
Correct!

75

Correct!
(10)

Correct!
Correct!

Changes in noncash balance sheet accounts that impact investing and financing:

Noncurrent Assets
Property, plant, and equipment
Long-term investments
Liabilities and Stockholders' equity
Bonds payable
Common stock

Increase in
Account
Balance
(80)

Decrease in
Account
Balance
Correct!
7

25

Correct!

Correct!
(40)

Correct!

Property, Plant and Equipment

Property, Plant and Equipment, beginning balance
Property, Plant and Equipment, ending balance
Debits to Property, Plant and Equipment
Credits to Property, Plant and Equipment

$
$
$
$

420
500
110
30

Correct!
Correct!
Correct!
Correct!

Retained Earnings
Retained Earnings, beginning balance
Retained Earnings, ending balance
Debits to Retained Earnings
Credits to Retained Earnings

$
$
$
$

92
132
16
56

Correct!
Correct!
Correct!
Correct!

Student Name:
Class:
Problem 14-8

Student Name:
Class:
Problem 14-8
EATON COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2011
Operating activities:
Net income
Adjustments needed to convert net income to cash basis:

Net cash provided by operating activities

Investing activities:

Net cash used for investing activities

Financing activities:

Net cash used in financing activities

Net decrease in cash
Cash balance, January 1, 2011
Cash balance, December 31, 2011

56

Given Data P14-8:

EATON COMPANY
Comparative Balance Sheet
December 31, 2011, and 2010
2011
Assets
Cash
Accounts receivable
Inventory
Prepaid expenses
Total current assets
Property, Plant, and equipment
Less accumulated depreciation
Net property, plant, and equipment
Long-term investments
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities
Bonds payable
Total liabilities
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity

2010
4
310
160
8
482
500
85
415
31
928

300
70
71
441
195
636
160
132
292
928

11
230
195
6
442
420
70
350
38
830

225
80
63
368
170
538
200
92
292
830

EATON COMPANY
Income Statement
For the Year Ended December 31, 2011
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Nonoperating items:
Gain on sale of investments
Loss on sale of equipment
Income before taxes
Income taxes
Net income
Equipment cost
Equipment selling price
Accumulated depreciation of equipment
Long-term investment purchase
Long-term investment sale
Paid cash dividend

5
2

$
$
$
$
$
$

30
18
10
7
12
?

750
450
300
223
77

3
80
24
56

Stock repurchase

40

Student Name:
Class:
Problem 14-14
1. and 2.
Calculation of depreciation to add back to Net Income:
Accumulated Depreciation, beginning balance
Accumulated Depreciation, ending balance
Debits to Accumulated Depreciation
Credits to Accumulated Depreciation
Changes in noncash balance sheet accounts that impact net income:

Current Assets
Accounts receivable
Inventory
Prepaid expenses

Increase in
Account
Balance

Decrease in
Account
Balance

Current Liabilities
Accounts Payable
Accrued liabilities
Income taxes payable
Changes in noncash balance sheet accounts that impact investing and financing:

Noncurrent Assets
Property, plant, and equipment
Long-term investments
Liabilities and Stockholders' equity
Bonds payable
Common stock
Property, Plant and Equipment
Property, Plant and Equipment, beginning balance
Property, Plant and Equipment, ending balance
Debits to Property, Plant and Equipment
Credits to Property, Plant and Equipment
Retained Earnings
Retained Earnings, beginning balance
Retained Earnings, ending balance
Debits to Retained Earnings
Credits to Retained Earnings

Increase in
Account
Balance

Decrease in
Account
Balance

Student Name:
Class:
Problem 14-14

ALLIED COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2011
Operating activities:
Net income
Adjustments needed to convert net income to a cash basis:

Net cash provided by operating activities

Investing activities:

Net cash used for investing activities

Financing activities:

Net cash provided by financing activities

Net decrease in cash
Cash balance, Beginning of year
Cash balance, End of year

3. Free cash flow computation

Net cash provided by operating activities
Capital expenditures
Dividends
Free cash flow

Given Data P14-14:

Minimum cash balance

20,000

ALLIED COMPANY
Comparative Balance Sheet
December 31, 2011, and 2010
2011

2010

Assets
Current assets:
Cash
Accounts receivable
Inventory
Prepaid expenses
Total current assets
Long-term investments
Plant and equipment
Less accumulated depreciation
Net plant and equipment
Total assets

15,000
200,000
250,000
7,000
472,000
90,000
860,000
210,000
650,000
1,212,000

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable
$
175,000
Accrued liabilities
$
8,000
Income taxes payable
42,000
Total current liabilities
225,000
Bonds payable
200,000
Total liabilities
425,000
Stockholders' equity:
Common stock
595,000
Retained earnings
192,000
Total stockholders' equity
787,000
Total liabilities and stockholders' equity
$
1,212,000

$
$

33,000
210,000
196,000
15,000
454,000
120,000
750,000
190,000
560,000
1,134,000

230,000
15,000
39,000
284,000
100,000
384,000
600,000
150,000
750,000
1,134,000

Given Data P14-14:

ALLIED COMPANY
Income Statement
For the Year Ended December 31, 2011
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Nonoperating items:
Gain on sale of investments
Loss on sales of equipment
Income before taxes
Income taxes
Net income

20,000
6,000

Additional information:
Long-term investment cost
Long-term investment sale
Equipment cost
Equipment accumulated depreciation
Equipment selling price
Dividends declared and paid
Stock was repurchased for cash

$
$
$
$
$

30,000
50,000
90,000
40,000
44,000
?
?

800,000
500,000
300,000
214,000
86,000

14,000
100,000
30,000
70,000

Student Name:
Class:
Problem 14A-5
EATON COMPANY
Adjusted Income Statement
For the Year Ended December 31, 2011
Sales
Adjustments to a cash basis:

Cost of goods sold

Adjustments to a cash basis:

Selling and administrative expenses

Adjustments to a cash basis:

Income taxes
Adjustments to a cash basis:
Net cash provided by operating activities

EATON COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2011
Operating activities:
Cash received from customers
Less cash disbursements for:

Total cash disbursements

Net cash provided by operating activities
Investing activities:

Net cash used in investing activities

Financing activities:

Net cash used in financing activities

Net decrease in cash
Cash balance, beginning

Cash balance, ending

Given Data P14A-5:

EATON COMPANY
Comparative Balance Sheet
December 31, 2011, and 2010
2011
Assets
Cash
Accounts receivable
Inventory
Prepaid expenses
Total current assets
Property, Plant, and equipment
Less accumulated depreciation
Net property, plant, and equipment
Long-term investments
Total assets
Liabilities and Stockholders' Equity
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities
Bonds payable
Total liabilities
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity

2010
4
310
160
8
482
500
85
415
31
928

300
70
71
441
195
636
160
132
292
928

11
230
195
6
442
420
70
350
38
830

225
80
63
368
170
538
200
92
292
830

EATON COMPANY
Income Statement
For the Year Ended December 31, 2011
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Nonoperating items:
Gain on sale of investments
Loss on sale of equipment
Income before taxes
Income taxes
Net income
Equipment cost
Equipment selling price

5
2

$
$
$

30
18

750
450
300
223
77

3
80
24
56

Accumulated depreciation of equipment

Long-term investment purchase
Long-term investment sale
Paid cash dividend
Stock repurchase

$
$
$

10
7
12
?

40