Complete Problem 3

all sales and purchases involved cash. 1. Determine "gains on the two items sold. 2. Assume these activities constitute the investing activities of the Dobson Place for 20X3. Prepare the cash flow from investing activities section of its statement of cash flows. Required: Problem 3 The Westland Inn had net earnings of $65,000 during 20X5. Included on its income statement for 20X5 were depreciation and amortization expenses of $150,000 and $5,000, respectively. Its current accounts on its comparative balance sheet showed the following: December 31 20X4 20X5 $12,000 27,000 40,000 17,000 Cash Marketable Securities Accounts Receivable Inventory Prepaid Expense Accounts Payable Accrued Payroll Income Taxes Payable Current Maturities of Long-Term Debt Dividends Payable 8,000 $10,000 25,000 45,000 15,000 10,000 25,000 8,000 10,000 15,000 5,000 30,000 10,000 8,000 18,000 8,000 In addition, sales of equipment, marketable securities, and investments during 20X5 were 1. Equipment that cost $20,000 with accumulated depreciation of $12,000 was sold for 484 Chapter 17 as follows: $5,000. 2. Investments that cost $20,000 were sold for $25,000. a 3. Marketable securities that cost $10,000 were sold for $8,000. Required: Prepare a schedule of cash flows from operating activities for 2014. 2 0X5 Problem 4 The Stuart House (SH) has the following current accounts on its balance sheet at the end of the last two years. 20X1 20X2 Cash Accounts Receivable Food Inventory Total Current Assets $ 60,000 120,000 30,000 $210,000 $ 65,000 100,000 32,000 $197,000 Accounts Payable Accrual Wages Total Current Liabilities $ 40,000 10,000 $ 50,000 $ 45,000 12,000 $ 57,000 addition, SH had $55,000 of net earnings for 20X2 after subtracting depreciation expense 585,000. uired: struct the cash flow from