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# Directions: Answer the following questions on a separate Microsoft Word or Excel document.

Explain how
you reached the answer or show your work if a mathematical calculation is needed, or both. Submit your
assignment using the assignment link in Blackboard.
Exercises
E13-3. Cushenberry Corporation had the following transactions.
1.
2.
3.
4.
5.
6.

## Sold land (cost \$12,000) for \$15,000.

Issued common stock at par for \$20,000.
Recorded depreciation on buildings for \$17,000.
Paid salaries of \$9,000.
Issued 1,000 shares of \$1 par value common stock for equipment worth \$8,000.
Sold equipment (cost \$10,000, accumulated depreciation \$7,000) for \$1,200.

Instructions
For each transaction above, (a) prepare the journal entry, and (b) indicate how it would affect the
statement of cash ows using the indirect method.
E13-4. Gutierrez Company reported net income of \$225,000 for 2015. Gutierrez also reported
depreciation expense of \$45,000 and a loss of \$5,000 on the disposal of equipment. The comparative
balance sheet shows a decrease in accounts receivable of \$15,000 for the year, a \$17,000 increase in
accounts payable, and a \$4,000 decrease in prepaid expenses.
Instructions
Prepare the operating activities section of the statement of cash ows for 2015. Use the indirect method.

Problems
P13-3A. The income statement of Whitlock Company is presented here.

1. Accounts receivable increased \$200,000 during the year, and inventory decreased \$500,000.
2. Prepaid expenses increased \$150,000 during the year.
3. Accounts payable to suppliers of merchandise decreased \$340,000 during the year.
4. Accrued expenses payable decreased \$100,000 during the year.
5. Operating expenses include depreciation expense of \$70,000.
Instructions
Prepare the operating activities section of the statement of cash ows for the year ended November 30,
2015, for Whitlock Company, using the indirect method.