Name: Date: Instructor: Course: Managerial Accounting, 3rd Edition, by Weygandt, Kieso, and Kimmel Solving Managerial Accounting Problems Using Microsoft Excel for Windows by Rex A Schildhouse Problem P13-7A, Here are the financial statements of Newman Company: NEWMAN COMPANY Comparative Balance Sheets December 31 Assets 2005 2004 Cash $31,000 $20,000 Accounts receivable 38,000 14,000 Merchandise inventory 27,000 20,000 Property, plant, and equipment $60,000 $78,000 Less: Accumulated depreciation (30,000) 30,000 (24,000) 54,000 Total $126,000 $108,000 Liabilities and Stockholders' Equity Accounts payable $29,000 $15,000 Income taxes payable 7,000 8,000 Bonds payable 27,000 33,000 Common stock 18,000 14,000 Retained earnings 45,000 38,000 Total $126,000 $108,000 NEWMAN COMPANY Income Statement For the Year Ended December 31, 2005 Sales $242,000 Cost of Goods Sold 175,000 Gross profit 67,000 Selling expenses $18,000 Administrative expenses 6,000 24,000 Income from operations 43,000 Interest expense 3,000 Income before income taxes 40,000 Income tax expense 6,000 Net income $34,000 Additional data: 1. Dividends declared and paid were $36,000 2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale. 3. All depreciation expense is in the selling expense category. 4. All sales and purchases are on account. FileName: 00ab48d9-8b8c-4984-9051-ee94946a0d91.xls, Tab: Problem P13-7B, Page 1 of 3, 9/13/2011, 4:57 PM Name: Date: Instructor: Course: Instructions: Accounting, 3rd Edition, by Weygandt, Kieso, and Kimmel Managerial (a) Prepare a statement of cash flows using the indirect method. NEWMAN COMPANY Statement of Cash Flows For the Year Ended December 31, 2005 Cash flows from operating activities Net income Amount Adjustments to reconcile net income to net cash provided by operating activities Title Amount Title Amount Title Amount Title Amount Title Amount Formula Net cash provided by operating activities Formula Title Title Amount Net cash provided by investing activities Formula Title Title Amount Title Amount Title Formula Net decrease in cash Formula Title Amount Title Formula (b)(1) Compute the cash based current cash debt-basis ratio. Amount + Amount Amount ÷ = Formula times Number Calculation area as desired Calculation area as desired (b)(2) Compute the cash based cash debt coverage ratio. Amount + Amount Amount ÷ = Formula times Number Calculation area as desired Calculation area as desired (b)(3) Compute the cash based free cash flow. Amount - - Amount = Formula FileName: 00ab48d9-8b8c-4984-9051-ee94946a0d91.xls, Tab: Problem P13-7B, Page 2 of 3, 9/13/2011, 4:57 PM Instructions for the Microsoft Excel Templates Detail and information on Excel is contained within the manual. Striking the "F1" key or following the path "Windows>Excel Help" will invoke the Office Assistant and bring up one of several help menus. Type your name into the cell "D5". This will be copied by formula to the rest of the pages as required. Type the due date of your problem into cell "I5". This will be copied by formula to the rest of the pages as required. Type the instructor's name into cell "D6". This will be copied by formula to the rest of the pages as required. Type the course identifier into cell "I6". This will be copied by formula to the rest of the pages as required. The problem is identified for you in cell "B7". In "DATE" cells enter the date in any of several formats and Excel will format it correctly. If more than one page is preformatted into the problem, page breaks are preset and formulas are set to copy the header into the remaining pages. Place the proper account title in the cell where the word "ACCOUNT" appears on the template. Place the amount in the cell where the word "AMOUNT" appears on the template. A formula may be placed in Enter a number like 914 to signify units or gallons where the word "NUMBER" appears. Write a formula into cells where the word "FORMULA" appears. In these cells, an amount calculated outside of Place the explanation for the entry in the cell where the word "EXPLANATION" appears on the template. Insert the account number where "ACCT #" appears on the template during posting. Insert the journal reference where "JOURN #" appears on the template during posting. Insert the title in the cell where "TITLE" appears on the template. The print area is defined to fit onto 8 1/2" X 11" sheets in portrait or landscape mode as required. The gray filled cells define the perimeter of the problem and the print area. The problem is formatted for whole dollars with comma separations (no cents) except where required. The display may have "Freeze Pane" invoked so column titles remain visible during data entry. Negative values may be shown as ($400) vice -$400. Enter a string like: ($259,417 X 12 months) + (0.3651 X 5,434,631) where the word TEXT appears.