Create a common-size statement of cash flows for 2020 that can be switched between using sales and the 2019 cash balance in the denominator 1. Using the data presented below:SalesCost of GoodsGross ProfitBig Rock Candy Mountain Mining Co.Income StatementsFor the Years 2019 and 20202020$412,500318,78693,71429,80026,2501,21036,4548,58227,8726,96820,904DepreciationSelling & Admin. ExpenseOther Operating ExpenseNet Operating IncomeInterest ExpenseEarnings Before TaxesTaxesNet IncomeNotes:Tax RateSharesEarnings per Share25.00%52,100$0.402019$398,600315,30083,30029,65224,5501,24527,8538,45719,3964,84914,54725.00%52,100$0.28 AssetsCashBig Rock Candy Mountain Mining Co.Balance SheetFor the Year Ended December 31, 20202020Marketable SecuritiesAccounts ReceivableInventoryTotal Current AssetsGross Fixed AssetsAccumulated DepreciationNet Plant & EquipmentTotal AssetsLiabilities & Owner's EquityAccounts PayableAccrued ExpensesTotal Current LiabilitiesLong-term DebtTotal LiabilitiesCommon Stock ($1.00 par)Additional Paid-in-CapitalRetained EarningsTotal Owner's EquityTotal Liab. & Owner's Equity$16,4353,65645,89652,397118,384436,57387,450349,123467,507$37,7523,18340,935170,562211,49758,664136,80760,539256,010467,5072019$11,59661947,40454,599114,218397,02357,650339,373453,591$36,8193,08539,904178,581218,48558,664136,80739,635235,106453,591

Answer - Cashflow Statement - The Cash flow statement sum up movement of cash and cash…

1. Using the data presented below: Sales Cost of Goods Gross Profit Big Rock Candy Mountain Mining Co. Income Statements For the Years 2019 and 2020 2020 $412,500 318,786 93,714 29,800 26,250 1,210 36,454 8,582 27,872 6,968 20,904 Depreciation Selling & Admin. Expense Other Operating Expense Net Operating Income Interest Expense Earnings Before Taxes Taxes Net Income Notes: Tax Rate Shares Earnings per Share 25.00% 52,100 $0.40 2019 $398,600 315,300 83,300 29,652 24,550 1,245 27,853 8,457 19,396 4,849 14,547 25.00% 52,100 $0.28

1. Using the data presented below: Sales Cost of Goods Gross Profit Big Rock Candy Mountain Mining Co. Income Statements For the Years 2019 and 2020 2020 $412,500 318,786 93,714 29,800 26,250 1,210 36,454 8,582 27,872 6,968 20,904 Depreciation Selling & Admin. Expense Other Operating Expense Net Operating Income Interest Expense Earnings Before Taxes Taxes Net Income Notes: Tax Rate Shares Earnings per Share 25.00% 52,100 $0.40 2019 $398,600 315,300 83,300 29,652 24,550 1,245 27,853 8,457 19,396 4,849 14,547 25.00% 52,100 $0.28

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Create a common-size statement of cash flows for 2020 that can be switched between using sales and the 2019 cash balance in the denominator

1. Using the data presented below:
Sales
Cost of Goods
Gross Profit
Big Rock Candy Mountain Mining Co.
Income Statements
For the Years 2019 and 2020
2020
$412,500
318,786
93,714
29,800
26,250
1,210
36,454
8,582
27,872
6,968
20,904
Depreciation
Selling & Admin. Expense
Other Operating Expense
Net Operating Income
Interest Expense
Earnings Before Taxes
Taxes
Net Income
Notes:
Tax Rate
Shares
Earnings per Share
25.00%
52,100
$0.40
2019
$398,600
315,300
83,300
29,652
24,550
1,245
27,853
8,457
19,396
4,849
14,547
25.00%
52,100
$0.28

Assets
Cash
Big Rock Candy Mountain Mining Co.
Balance Sheet
For the Year Ended December 31, 2020
2020
Marketable Securities
Accounts Receivable
Inventory
Total Current Assets
Gross Fixed Assets
Accumulated Depreciation
Net Plant & Equipment
Total Assets
Liabilities & Owner's Equity
Accounts Payable
Accrued Expenses
Total Current Liabilities
Long-term Debt
Total Liabilities
Common Stock ($1.00 par)
Additional Paid-in-Capital
Retained Earnings
Total Owner's Equity
Total Liab. & Owner's Equity
$16,435
3,656
45,896
52,397
118,384
436,573
87,450
349,123
467,507
$37,752
3,183
40,935
170,562
211,497
58,664
136,807
60,539
256,010
467,507
2019
$11,596
619
47,404
54,599
114,218
397,023
57,650
339,373
453,591
$36,819
3,085
39,904
178,581
218,485
58,664
136,807
39,635
235,106
453,591

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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