Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN: 9781337788281
Author: James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher: Cengage Learning
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Chapter 5, Problem 11C
To determine
Prepare a short memo to the president that summarizes the manner in which the given transaction would be reported on the 2019 statement of
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Company ABC is preparing its 2021 financial statements. At the end of 2021, the company purchased a building for $500,000 making a down payment of $200,000 cash and signing a $300,000 mortgage note. The president of Company ABC, Jackie Brown understand that debt transactions are considered a financing activity from a business perspective and also, that purchases of long-term assets are investing activities.
Summarize how this transaction is to be reported on the State of Cash Flows using the related GAAP.
Required:
- What are the issues of the given case? List them.
- Show how the transaction is to be recorded on the statement of cash flows (Journal entries).
- Give an example of the disclousure required for the particular items .
- Give your reasoning/support based on guidance from the codification.
C21-11 Researching GAAP
Situation
You are the new accountant for 12th National Bank and are preparing its 2019 statement of cash flows. The bank reports net income of $75,800 on its 2019 income statement. Included in this net income are the following items: $6,700 gain on sale of trading securities, $1,200 unrealized holding gain on trading securities, and $5,100 loss on sale of securities available for sale. Among its 2019 transactions, the bank sold trading securities with a carrying value of $22,900 for $29,600, and purchased trading securities for $65,200. The bank sold securities available for sale with a cost (and carrying value) of $58,700 for $53,600, and purchased securities available for sale for $39,400. It also made routine 90-day loans of $47,500 to customers and collected $20,000 principal on these customer loans. As a result of the preceding information, the bank’s trading securities account increased by $43,500, the securities available for sale account decreased by…
Target Corporation prepares its financial statements according to U.S. GAAP. Target's financial statements and disclosure notes for the
year ended February 1, 2020, are available here. This material also is available under the Investor Relations link at the company's
website (www.target.com).
Required:
1. Did Target's cash provided by operating activities in fiscal 2019 increase or decrease from the previous year?
2. Is Target's cash provided by operating activities more or less than net income in fiscal 2019?
3. What is Target's largest investing activity?
4. Is Target increasing or decreasing its long-term debt?
5. Some transactions that don't increase or decrease cash must be reported in conjunction with a statement of cash flows. What
activity of this type did Target report during each of the three years presented?
Complete this question by entering your answers in the tabs below.
Req 1
Req 2
Req 3
Req 4
Req 5
Did Target's cash provided by operating activities in fiscal 2019…
Chapter 5 Solutions
Intermediate Accounting: Reporting And Analysis
Ch. 5 - In general, how does the income statement help...Ch. 5 - Prob. 2GICh. 5 - Define income under the capital maintenance...Ch. 5 - Prob. 4GICh. 5 - What is net income?Ch. 5 - What three things must a company determine to...Ch. 5 - Prob. 7GICh. 5 - Prob. 8GICh. 5 - Give an example and explanation for each of the...Ch. 5 - Define expenses. What do expenses measure?
Ch. 5 - Prob. 11GICh. 5 - Define gains and losses. Give examples of three...Ch. 5 - Prob. 13GICh. 5 - What items are included in a companys income from...Ch. 5 - How are unusual or infrequent gains or losses...Ch. 5 - What is interperiod tax allocation?Ch. 5 - Prob. 17GICh. 5 - Prob. 18GICh. 5 - Prob. 19GICh. 5 - Prob. 20GICh. 5 - Prob. 21GICh. 5 - Prob. 22GICh. 5 - Prob. 23GICh. 5 - Prob. 24GICh. 5 - Prob. 25GICh. 5 - Prob. 26GICh. 5 - Prob. 27GICh. 5 - Prob. 28GICh. 5 - Prob. 29GICh. 5 - Prob. 30GICh. 5 - What is the rate of return on common equity? What...Ch. 5 - Prob. 32GICh. 5 - Prob. 33GICh. 5 - Which of the following is expensed under the...Ch. 5 - The following information is available for Cooke...Ch. 5 - The following information is available for Wagner...Ch. 5 - Prob. 4MCCh. 5 - A loss from the sale of a component of a business...Ch. 5 - In a statement of cash flows, receipts from sales...Ch. 5 - Brandt Corporation had sales revenue of 500,000...Ch. 5 - Refer to RE5-1. Prepare a single-step income...Ch. 5 - Shaquille Corporation began the current year with...Ch. 5 - Dorno Corporation incurred expenses during the...Ch. 5 - Niler Corporation reported the following after-tax...Ch. 5 - Jordan Corporation reported retained earnings of...Ch. 5 - Prob. 7RECh. 5 - Prob. 8RECh. 5 - Amelias Bookstore reported net income of 62,000...Ch. 5 - Prob. 10RECh. 5 - Prob. 1ECh. 5 - Cost of Goods Sold and Income Statement Schuch...Ch. 5 - Income Statement Calculation OConnor Companys...Ch. 5 - Results of Discontinued Operations On November 30,...Ch. 5 - Multiple-Step and Single-Step In coin Statements...Ch. 5 - Prob. 6ECh. 5 - Multiple-Step and Single-Step Income Statements,...Ch. 5 - Cost of Goods Sold, Income Statement. and...Ch. 5 - Net Cash Flow from Operating Activities The...Ch. 5 - Prob. 10ECh. 5 - Statement of Cash Flows The following items...Ch. 5 - Statement of Cash Flows The following are several...Ch. 5 - Classifications Where would each of the following...Ch. 5 - Rate of Change nalyses eiher Company presents the...Ch. 5 - Prob. 15ECh. 5 - Prob. 16ECh. 5 - Income Statement and Retained Earnings Huff...Ch. 5 - Prob. 18ECh. 5 - Interim Reporting (Appendix 5.1) Miller Company...Ch. 5 - Prob. 1PCh. 5 - Prob. 2PCh. 5 - Income Statement, Lower Portion Cunningham Company...Ch. 5 - Financial Statement Violations of U.S. GAAP The...Ch. 5 - Misclassiflcations Rox Corporations multiple-step...Ch. 5 - Misclassifications Olson Companys bookkeeper...Ch. 5 - Complex Income Statement The following items were...Ch. 5 - Prob. 8PCh. 5 - Financial Statement Deficiencies The following is...Ch. 5 - Comprehensive: Balance Sheet from Statement of...Ch. 5 - Net Income and Comprehensive Income At the...Ch. 5 - Statement of Cash Flows A list of Fischer Companys...Ch. 5 - Statement of Cash Flows The following are Mueller...Ch. 5 - Prob. 14PCh. 5 - Rate of Change Analyses and Ratios Analyses The...Ch. 5 - Comprehensive: Income Statement and Retained...Ch. 5 - Comprehensive: Income Statement and Supporting...Ch. 5 - Prob. 18PCh. 5 - Prob. 19PCh. 5 - Prob. 20PCh. 5 - Prob. 1CCh. 5 - Prob. 2CCh. 5 - Prob. 3CCh. 5 - Prob. 4CCh. 5 - Nonrecurring Items Lynn Company sells a component...Ch. 5 - Prob. 6CCh. 5 - Accrual Accounting GAAP requires the use of...Ch. 5 - Ethics and Sale of Operating Component It is the...Ch. 5 - Analyzing Starbuckss Income Statement and Cash...Ch. 5 - Prob. 11C
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