CHAPTER 16 STATEMENT OF CASH FLOWS CLASS DISCUSSION QUESTIONS It is costly to accumulate the data needed It focuses on the differences between net income and cash flows from operating activities, and the data needed are generally more readily available and less costly to obtain than is the case for the direct method In a separate schedule of noncash investing and financing activities accompanying the statement of cash flows a No effect b No The $25,000 increase must be added to income from operations because the amount of cash paid to merchandise creditors was $25,000 less than the amount of purchases included in the cost of goods sold The $10,000 decrease in salaries payable should be deducted from income to determine the amount of cash flows from operating activities The effect of the decrease in the amount of salaries owed was to pay $10,000 more cash during the year than had been recorded as an expense a $5,000 gain b Cash inflow of $80,000 c The gain of $5,000 would be deducted from net income in determining net cash flow from operating activities; $80,000 would be reported as cash flow from investing activities Cash flow from financing activities— issuance of bonds, $5,250,000 a Cash flow from investing activities— disposal of fixed assets, $5,000 The $5,000 gain on asset disposal should be deducted from net income in determining cash flow from operating activities under the indirect method b No effect 10 The same The amount reported as the net cash flow from operating activities is not affected by the use of the direct or indirect method 11 Cash received from customers, cash payments for merchandise, cash payments for operating expenses, cash payments for interest, cash payments for income taxes 12 Reported in a separate schedule, as follows: Schedule of noncash financing activities: Issuance of stock for acquisitions $128 million 209 EXERCISES Ex 16–1 There were net additions, such as depreciation and amortization of intangible assets of $10.2 billion, to the net loss reported on the income statement to convert the net loss from the accrual basis to the cash basis For example, depreciation is an expense in determining net income, but it does not result in a cash outflow Thus, depreciation is added back to the net loss in order to determine cash flow from operations The cash from operating activities detail is provided as follows for class discussion: AOL Time Warner Cash Flows from Operating Activities (selected from Statement of Cash Flows) (in millions) OPERATING ACTIVITIES Net income (loss) Adjustments for noncash and nonoperating items: Depreciation and amortization Amortization of film costs Loss on writedown of investments Net gains on sale of investments Equity in losses of other investee companies net of cash distributions Changes in operating assets and liabilities, net of acquisitions: Receivables Inventories Accounts payable and other liabilities Other balance sheet changes Cash provided by operating activities $(4,921) 9,203 2,380 2,537 (34) 975 (484) (2,801) (1,952) 391 $ 5,294 Ex 16–2 a b c d e f g h Cash receipt, $225,000 Cash receipt, $41,000 Cash payment, $120,000 Cash payment, $250,000 Cash receipt, $101,000 Cash payment, $37,500 Cash payment, $501,000 Cash payment, $30,000 Ex 16–3 a b c d e f g h i j k investing investing financing investing operating financing financing financing investing financing financing Ex 16–4 a b c d e f g h i j added added deducted deducted deducted added added added added deducted k deducted Ex 16–5 a Cash flows from operating activities: Net income Add: Depreciation $53,500 Decrease in accounts receivable 1,600 Decrease in prepaid expenses 200 Increase in salaries payable 400 Deduct: Increase in inventories $13,300 Decrease in accounts payable 6,100 Cash from operations $255,800 55,700 $311,500 19,400 $292,100 b Yes The amount of cash flows from operating activities reported on the statement of cash flows is not affected by the method of reporting such flows Ex 16–6 Cash flows from operating activities: Net income Add: Depreciation Decrease in accounts receivable Increase in wages payable Deduct: Increase in inventories Increase in prepaid expenses Decrease in accounts payable Cash from operations $ 75,000 $22,500 3,700 3,000 $ 5,500 400 1,900 29,200 $104,200 7,800 $96,400 Ex 16–7 Dividends declared Add decrease in dividends payable Dividends paid to stockholders during the year $80,000 5,000 $85,000 The company probably had four quarterly payments—the first one being $25,000 declared in the preceding year and three payments of $20,000 each—of dividends declared and paid during the current year Thus, $85,000 [$25,000 + (3 × $20,000)] is the amount of cash payments to stockholders The $20,000 of dividends payable at the end of the year will be paid in the next year Ex 16–8 Cash flows from investing activities: Cash received from sale of equipment $25,000 [The gain on the sale, $5,000 ($25,000 proceeds from sale less $20,000 book value), would be deducted from net income in determining the cash flows from operating activities if the indirect method of reporting cash flows from operations is used.] Ex 16–9 Cash flows from investing activities: Cash received from sale of equipment $75,000 [The loss on the sale, $5,000 ($75,000 proceeds from sale less $80,000 book value), would be added to net income in determining the cash flows from operating activities if the indirect method of reporting cash flows from operations is used.] Ex 16–10 Cash flows from investing activities: Cash received from sale of land Less: Cash paid for purchase of land $310,000 300,000 (The gain on the sale of land, $60,000, would be deducted from net income in determining the cash flows from operating activities if the indirect method of reporting cash flows from operations is used.) Ex 16–11 Cash flows from financing activities: Cash received from sale of common stock Less: Cash paid for dividends $480,000 240,000 Note: The stock dividend is not disclosed on the statement of cash flows Ex 16–12 Cash flows from investing activities: Cash paid for purchase of land $290,000 A separate schedule of noncash investing and financing activities would report the purchase of $200,000 land with a long-term mortgage note, as follows: Purchase of land by issuing long-term mortgage note $200,000 Ex 16–13 Cash flows from financing activities: Cash paid to redeem bonds payable Cash received from issuing bonds payable $ 48,000 185,000 Note: The discount amortization of $1,200 and the loss on retirement of the bonds of $2,000 ($48,000 less the bond carrying value of $46,000 on January 1) would be shown as adjusting items (increases) in the cash flows from operating activities section under the indirect method Ex 16–14 Net cash flow from operating activities Add: Increase in accounts receivable Increase in prepaid expenses Decrease in income taxes payable Gain on sale of investments Deduct: Depreciation Decrease in inventories Increase in accounts payable Net income, per income statement $105,700 $ 6,500 2,000 2,100 3,600 $11,000 6,400 4,700 14,200 $119,900 22,100 $ 97,800 Note to Instructors: The net income must be determined by working backward through the cash flows from operating activities section of the statement of cash flows Hence, those items which were added (deducted) to determine net cash flow from operating activities must be deducted (added) to determine net income Ex 16–15 Cash flows from operating activities*: Net income, per income statement Add: Depreciation Loss on sale of fixed assets Decrease in accounts receivable Decrease in merchandise inventories Increase in accounts payable and other accrued expenses Increase in income tax payable Deduct: Increase in prepaid expenses Other noncash income Cash from operations *Dollars in thousands $ 75,096 $81,594 3,950 6,025 33,793 4,156 12,145 $ 4,511 7,242 141,663 $216,759 11,753 $205,006 Ex 16–16 a Sales Plus decrease in accounts receivable balance Cash received from customers $510,000 27,000 $537,000 b Income tax expense Plus decrease in income tax payable Cash payments for income tax $ 29,000 3,900 $ 32,900 Ex 16–17 Cost of merchandise sold Add: Decrease in accounts payable Deduct: Decrease in merchandise inventories Cash paid for merchandise $7,604* 274 (266) $7,612 *In millions Ex 16–18 a Cost of merchandise sold Add decrease in accounts payable Deduct decrease in inventories Cash payments for merchandise b Operating expenses other than depreciation Add decrease in accrued expenses Deduct decrease in prepaid expenses Cash payments for operating expenses $450,000 4,700 $454,700 11,700 $443,000 $ 80,000 600 $ 80,600 1,000 $ 79,600 Ex 16–19 Cash flows from operating activities: Cash received from customers Deduct: Cash payments for merchandise $380,400 Cash payments for operating expenses 150,6003 Cash payments for income tax 29,0004 Net cash flow from operating activities $657,0001 560,000 $ 97,000 Computations: Sales Add decrease in accounts receivable Cash received from customers Cost of merchandise sold Add: Increase in inventories Decrease in accounts payable Cash payments for merchandise Operating expenses other than depreciation Deduct: Decrease in prepaid expenses Increase in accrued expenses Cash payments for operating expenses Income tax expense Add decrease in income tax payable Cash payments for income tax $645,000 12,000 $657,000 $367,800 $ 4,200 8,400 12,600 $380,400 $155,400 $ 2,500 2,300 4,800 $150,600 $ 25,400 3,600 $ 29,000 Ex 16–20 Cash flows from operating activities: Cash received from customers Deduct: Cash payments for merchandise $ 97,5002 Cash payments for operating expenses 125,8003 Cash payments for income tax 12,300 Net cash flow from operating activities $262,7001 235,600 Computations: Sales Deduct increase in accounts receivable Cash received from customers Cost of merchandise sold Add increase in inventories Deduct increase in accounts payable Cash payments for merchandise Operating expenses other than depreciation Add decrease in accrued expenses Deduct decrease in prepaid expenses Cash payments for operating expenses $ 27,100 $265,000 2,300 $262,700 $ 95,800 5,300 $101,100 3,600 $ 97,500 $125,700 500 $126,200 400 $125,800 Prob 16–4B Continued Computations: Sales Deduct increase in accounts receivable Cash received from customers $965,000 13,500 $951,500 Cost of merchandise sold Add increase in inventories Deduct increase in accounts payable Cash payments for merchandise $503,200 24,200 $527,400 16,700 $510,700 Operating expenses other than depreciation Add decrease in accrued expenses Cash payments for operating expenses $258,300 2,200 $260,500 Prob 16–4B Continued HEAVEN’S BOUNTY NURSERY INC Work Sheet for Statement of Cash Flows For the Year Ended December 31, 2007 Transactions Balance Dec 31, 2006 Balance Sheet Cash 154,300 Accounts receivable 189,700 Inventories 243,700 Investments 110,000 Land Equipment 210,000 Accumulated depreciation (93,400) Accounts payable (175,400) Accrued expenses (14,600) Dividends payable (30,400) Common stock (8,000) Paid-in capital in excess of par— common stock (100,000) Retained earnings (485,900) Totals Debit Credit (q) (p) (o) 20,100 (c) (l) 18,900 16,700 (j) (i) 1,700 2,000 134,200 203,200 267,900 140,000 290,000 (112,300) (192,100) (12,400) (32,100) (10,000) (i) 80,000 (g) 137,200 386,600 (180,000) (496,400) 13,500 24,200 (e) 110,000 (n) 140,000 (m) 80,000 (k) 2,200 (h) 126,700 386,600 Balance Dec 31, 2007 Prob 16–4B Concluded Transactions Balance Dec 31, 2006 Income Statement Sales Cost of merchandise sold Depreciation expense Other operating expenses Gain on sale of investments Income tax Net income Cash Flows Operating activities: Cash received from customers Cash payments: Merchandise Debit (a) 965,000 (e) 22,000 Balance Dec 31, 2007 (b) 503,200 (c) 18,900 (d) 258,300 (f) (g) 69,400 137,200 (a)965,000 (l) Operating expenses Income taxes Investing activities: Purchase of equipment Sale of investments Purchase of land Financing activities: Declaration of cash dividends Increase in dividends payable Issuance of common stock Net decrease in cash Totals Credit (e) (j) (i) (q) (p) 16,700 (b) 503,200 (o) 24,200 (d) 258,300 (k) 2,200 (f) 69,400 (m) 80,000 (n) 140,000 (h) 126,700 132,000 1,700 82,000 20,100 2,204,500 2,204,500 13,500 Prob 16–5B TRUE-TREAD FLOORING CO Statement of Cash Flows For the Year Ended June 30, 2006 Cash flows from operating activities: Cash received from customers Deduct: Cash payments for merchandise Cash payments for operating expenses Cash payments for income tax Net cash flow from operating activities Cash flows from investing activities: Cash received from sale of investments Less: Cash paid for purchase of land Cash paid for purchase of equipment Net cash flow used for investing activities $ 941,4001 $674,900 192,5003 28,100 895,500 $ 45,900 $ 41,000 $105,500 25,200 Cash flows from financing activities: Cash received from sale of common stock Less cash paid for dividends Net cash flow provided by financing activities Increase in cash Cash at the beginning of the year Cash at the end of the year 130,700 (89,700) $ 105,000 46,000* 59,000 $ 15,200 53,700 $ 68,900 Schedule Reconciling Net Income with Cash Flows from Operating Activities: Net income, per income statement $ 46,100 Add: Depreciation $ 7,700 Increase in accounts payable 4,100 Increase in accrued expenses 900 Loss on sale of investments 4,000 16,700 $ 62,800 Deduct: Increase in accounts receivable $ 3,800 Increase in inventories 13,100 16,900 Net cash flow from operating activities $ 45,900 *Dividends paid: $48,000 + $10,000 – $12,000 = $46,000 Prob 16–5B Continued Computations: Sales Deduct increase in accounts receivable Cash received from customers $945,200 3,800 $941,400 Cost of merchandise sold Add increase in inventories Deduct increase in accounts payable Cash payments for merchandise $665,900 13,100 $679,000 4,100 $674,900 Operating expenses other than depreciation Deduct increase in accrued expenses Cash payments for operating expenses $193,400 900 $192,500 Prob 16–5B Continued TRUE-TREAD FLOORING CO Work Sheet for Statement of Cash Flows For the Year Ended June 30, 2006 Transactions Balance June 30, 2005 Balance Sheet Cash 53,700 Accounts receivable 85,400 Inventories 132,700 Investments 45,000 Land Equipment 185,600 Accumulated depreciation (45,100) Accounts payable (100,200) Accrued expenses (14,300) Dividends payable (10,000) Common stock (50,000) Paid-in capital in excess of par— common stock (100,000) Retained earnings (182,800) Totals Debit (q) (p) (o) Credit 15,200 3,800 13,100 (e) 45,000 (c) (l) (k) (j) (i) 7,700 4,100 900 2,000 5,000 68,900 89,200 145,800 105,500 210,800 (52,800) (104,300) (15,200) (12,000) (55,000) (i) 100,000 (g) 46,100 210,800 (200,000) (180,900) (n) 105,500 (m) 25,200 (h) 48,000 210,800 Balance June 30, 2006 Prob 16–5B Concluded Transactions Balance June 30, 2005 Income Statement Sales Cost of merchandise sold Depreciation expense Other operating expenses Loss on sale of investments Income tax Net income Cash Flows Operating activities: Cash received from customers Cash payments: Merchandise Debit (a) Balance June 30, 2006 945,200 (b) 665,900 (c) 7,700 (d) 193,400 (e) 4,000 (f) 28,100 (g) 46,100 (a)945,200 (l) Operating expenses (k) Income taxes Investing activities: Purchase of equipment Sale of investments Purchase of land Financing activities: Declaration of cash dividends Increase in dividends payable Issuance of common stock Net increase in cash Totals Credit (e) (j) (i) (p) 4,100 (b) 665,900 (o) 13,100 (d) 193,400 900 (f) 28,100 (m) 25,200 (n) 105,500 (h) 48,000 (q) 15,200 2,043,400 41,000 2,000 105,000 2,043,400 3,800 SPECIAL ACTIVITIES Activity 16–1 Although this situation might seem harmless at first, it is, in fact, a gross violation of generally accepted accounting principles The operating cash flow per share figure should not be shown on the face of the income statement The income statement is constructed under accrual accounting concepts, while operating cash flow “undoes” the accounting accruals Thus, unlike Karen’s assertion that this information would be useful, more likely the information could be confusing to users Some users might not be able to distinguish between earnings and operating cash flow per share—or how to interpret the difference By agreeing with Karen, Jeff has breached his professional ethics because the disclosure would violate generally accepted accounting principles On a more subtle note, Karen is being somewhat disingenuous Apparently, Karen is not pleased with this year’s operating performance and would like to cover the earnings “bad news” with some cash flow “good news” disclosures An interesting question is: Would Karen be as interested in the dual per share disclosures in the opposite scenario—with earnings per share improving and cash flow per share deteriorating? Probably not Activity 16–2 Start-up companies are unique in that they frequently will have negative retained earnings and operating cash flows The negative retained earnings are often due to losses from high start-up expenses The negative operating cash flows are typical because growth requires cash Growth must be financed with cash before the cash returns For example, a company must expend cash to make the service in Period before selling it and receiving cash in Period The start-up company constantly faces spending cash today for the next period’s growth For OmniTech Inc., the money spent on salaries to develop the business is a cash outflow that must occur before the service provides revenues In addition, the company must use cash to market its service to potential customers In this situation, the only way the company stays in business is from the capital provided by the owners This owner-supplied capital is the lifeblood of a start-up company Banks will not likely lend money on this type of venture (except with assets as security) OmniTech Inc could be a good investment It all depends on whether the new service has promise The financial figures will not reveal this easily Only actual sales will reveal if the service is a hit Until this time the company is at risk If the service is not popular, the company will have no cash to fall back on—it will likely go bankrupt If, however, the service is successful, then OmniTech Inc should become self-sustaining and provide a good return for the shareholders Activity 16–3 The senior vice president is very focused on profitability but has been bleeding cash The increase in accounts receivable and inventory is striking Apparently, the new credit card campaign has found many new customers, since the accounts receivable is growing Unfortunately, it appears as though the new campaign has done a poor job of screening creditworthiness in these new customers In other words, there are many new credit card purchasers— unfortunately, they not appear to be paying off their balances The new merchandise purchases appear to be backfiring The company has received some “good deals,” except that they are only “good deals” if it can resell the merchandise If the merchandise has no customer appeal, then that would explain the inventory increase In other words, the division is purchasing merchandise that sits on the shelf, regardless of pricing The reduction in payables is the result of the division becoming overdue on payments The memo reports that most of the past due payables have been paid This situation is critical in the retailing business A retailer cannot afford a poor payment history, or it will be denied future merchandise shipments This is a signal of severe cash problems Overall, the picture is of a retailer having severe operating cash flow difficulties Note to Instructors: This scenario is essentially similar to KMART’s path to eventual bankruptcy It reported earnings, while having significant negative cash flows from operations due to expanding credit too liberally (increases in accounts receivable) and purchasing too much unsaleable inventory (increases in inventory) Eventually, KMART’s inventory write-down resulted in significant losses about the time it entered bankruptcy Activity 16–4 a Normal practice for determining the amount of cash flows from operating activities during the year is to begin with the reported net income This net income must ordinarily be adjusted upward and/or downward to determine the amount of cash flows Although many operating expenses decrease cash, depreciation does not so The amount of net income understates the amount of cash flows provided by operations to the extent that depreciation expense is deducted from revenue Accordingly, the depreciation expense for the year must be added back to the reported net income in arriving at cash flows from operating activities Generally accepted accounting principles require that significant transactions affecting future cash flows should be reported in a separate schedule to the statement, even though they not affect cash Accordingly, even though the issuance of the common stock for land does not affect cash, the transaction affects future cash flows and must be reported The $42,500 cash received from the sale of the investments is reported in the cash flows from investing activities section Since the sale included a gain of $7,500, to avoid double reporting of this amount, the gain is deducted from net income to remove it from the determination of cash flows from operating activities The balance sheets for the last two years will indicate the increase in cash but will not indicate the firm’s activities in meeting its financial obligations, paying dividends, and maintaining and expanding operating capacity Such information, as provided by the statement of cash flows, assists creditors in assessing the firm’s solvency and profitability—two very important factors bearing on the evaluation of a potential loan b The statement of cash flows indicates a strong liquidity position for Kitchens By Design, Inc The increase in cash of $76,400 for the past year is more than adequate to cover the $50,000 of new building and store equipment costs that will not be provided by the loan Thus, the statement of cash flows most likely will enhance the company’s chances of receiving a loan However, other information, such as a projection of future earnings, a description of collateral pledged to support the loan, and an independent credit report, would normally be considered before a final loan decision is made Activity 16–5 Recent statements of cash flows for Johnson & Johnson and AMR Corp (American Airlines) are shown on the following pages The actual analysis may be different due to updated information However, this answer shows the structure for a possible response Johnson & Johnson Johnson & Johnson (J&J) is a powerful generator of cash flows from operating activities, with over $8 billion in cash flows This is enough to support over $2 billion in new investment, with the remainder available for dividends and repurchases of common stock Overall, the statement of cash flows indicates very favorable cash flows for J&J J&J’s free cash flow is approximately $3.7 billion for the year ($8.2 – $2.1 – $2.4) JOHNSON & JOHNSON Consolidated Statements of Cash Flows 29-Dec-02 In Millions For Period Ended Dec 29, 2002 Cash flows from operating activities: Net earnings Adjustments to reconcile net earnings to cash flows: Depreciation and amortization of property and intangibles Purchased in-process research and development Deferred tax provision Accounts receivable reserves Changes in assets and liabilities, net of effects from acquisition of businesses: Increase in accounts receivable (Increase) decrease in inventories Increase in accounts payable and accrued liabilities (Increase) decrease in other current and non-current assets Increase in other current and non-current liabilities Net cash flows from operating activities Cash flows from investing activities: Additions to property, plant and equipment Proceeds from the disposal of assets Acquisition of business, net of cash acquired (Note 17) Purchases of investments Sales of investments Other Net cash used by invest activities 12/29/02 6,597 1,662 189 (74) (6) (510) (109) 1,420 (1,429) 436 $ 8,176 (2,099) 156 (478) (6,923) 7,353 (206) $(2,197) Activity 16–5 (Continued) In Millions For Period Ended Dec 29, 2002 Cash flows from financing activities: Dividends to shareholders Repurchase of common stock Proceeds from short-term debt Retirement of short-term debt Proceeds from long-term debt Retirement of long-term debt Proceeds from the exercise of stock options Net cash used by financing activities Effect of exchange rate changes on cash and cash equivalents (Decrease) increase in cash and cash equivalents Cash and cash equivalents, beginning of year (Note 1) Cash and cash equivalents, end of year (Note 1) Supplemental cash flow data Cash paid during the year for: Interest Income taxes Supplemental schedule of noncash investing and financing activities Treasury stock issued for employee compensation and stock option plans, net of cash proceeds Conversion of debt Acquisition of businesses Fair value of assets acquired Fair value of liabilities assumed Treasury stock issued at fair value Net cash paid for acquisitions 12/29/02 (2,381) (6,538) 2,359 (560) 22 (245) 390 $(6,953) 110 $ (864) 3,758 2,894 141 2,006 946 131 550 (72) 478 478 AMR Corp AMR is an exact opposite to that of J&J AMR had negative cash flows from operating activities of over $1 billion In addition, AMR had net negative cash flows from investing activities of approximately $1.4 billion As a result, AMR needed sources of cash from financing activities AMR issued $3 billion in debt during the year This is an example of “living off borrowing.” AMR will need to eventually generate positive cash flows from operating activities, since this is not a sustainable cash flow strategy Activity 16–5 (Continued) AMR CORP Consolidated Statements of Cash Flows 31-Dec-02 In Millions For Period Ended Dec 31, 2002 Cash flows from operating activities: Income (loss) from continuing operations after extraordinary loss and cumulative effect of accounting change Adjustments to reconcile income (loss) from continuing operations after extraordinary loss and cumulative effect of accounting change to net cash (used) provided by operating activities: Depreciation Amortization Provisions for asset impairments Goodwill impairment Deferred income taxes Additional tax refunds due to tax law change Extraordinary loss on early extinguishments of debt Change in assets and liabilities: Decrease (increase) in receivables Decrease (increase) in inventories Increase (decrease) in accounts payable and accrued liabilities Increase (decrease) in air traffic liability Increase (decrease) in other liabilities and deferred credits Other, net Net cash (used) provided by operating activities Cash flow from investing activities: Capital expenditures, including purchase deposits on flight equipment Acquisition of Trans World Airlines, Inc Net (increase) decrease in short-term investments Net increase in restricted cash and short-term investments Proceeds from: Sale of equipment and property and other investments Dividend from Sabre Holdings Corporation Other Net cash used for investing activities 12/31/02 (3,511) 1,210 156 463 988 (845) 371 (66) 48 (32) (154) 188 $ 73 (1,111) (1,881) 540 (248) 220 (24) $(1,393) Activity 16–5 (Concluded) In Millions For Period Ended Dec 31, 2002 Cash flow from financing activities: Payments on long-term debt and capital lease obligations Proceeds from: Issuance of long-term debt Sale-leaseback transactions Exercise of stock options Net cash provided by financing activities Net increase in cash Cash at beginning of year Cash at end of year Activities not affecting cash distribution of Sabre Holdings Corporation shares to AMR shareholders 12/31/02 (687) 3,099 91 $ 2,506 102 104 ... flows Ex 16 12 Cash flows from investing activities: Cash paid for purchase of land $290,000 A separate schedule of noncash investing and financing activities would report the purchase of... $ 29,000 3,900 $ 32,900 Ex 16 17 Cost of merchandise sold Add: Decrease in accounts payable Deduct: Decrease in merchandise inventories Cash paid for merchandise $7,604* 274... Dec 31, 2006 464,100 163 ,200 395,000 160 ,000 695,500 (194,000) (228,700) (16, 500) (14,000) (75,000) (i) 90,000 (265,000) 56,000 (g) 180,600 (1,084,600) 453,800 453,800 Prob 16 5A Concluded Transactions