As of Year-End ($ thousands) 2020 2019 Liabilities & Shareholders' Equity Accounts payable ..... Short-term bank debt $ 890,000 190,000 $ 850,000 Total liabilities.... 1,080,000 850,000 Shareholders' equity Common stock, $10 par value Additional paid-in-capital. . . . . Retained earnings. ... $ 675,000 $ 775,000 380,000 870,000 .. 300,000 415,000 Total shareholders' equity 2,025,000 1,390,000 Total liabilities & shareholders' equity $3,105,000 $2,240,000 LINCOLN CORPORATION Consolidated Income Statement For Year Ended ($ thousands) 2020 2019 Revenues.... Less: Cost of goods sold $1,448,000 513,000 $1,200,000 420,000 Gross margin .... Less: Selling, general & administrative expenses 935,000 780,000 120,000 150,000 Operating income..... Gain on sale of investments .. 785,000 660,000 70,000 Net income before taxes. . . 660,000 11,000 855,000 .. Less: Income taxes. . . 50,000 Net income after taxes . . $ 805,000 $ 649,000 The footnotes to the Lincoln Corporation's financial statements revealed the following additional information: 1. Property and equipment costing $450 million was sold for its book value of $200 million. 2. Long-term investments were sold for $150 million, which included a gain of $70 million. Required Using the above financial data for the Lincoln Corporation, prepare the firm's statement of cash flow for 2020 using the indirect method. What does the company's statement of cash flow reveal about the business's aolth?
As of Year-End ($ thousands) 2020 2019 Liabilities & Shareholders' Equity Accounts payable ..... Short-term bank debt $ 890,000 190,000 $ 850,000 Total liabilities.... 1,080,000 850,000 Shareholders' equity Common stock, $10 par value Additional paid-in-capital. . . . . Retained earnings. ... $ 675,000 $ 775,000 380,000 870,000 .. 300,000 415,000 Total shareholders' equity 2,025,000 1,390,000 Total liabilities & shareholders' equity $3,105,000 $2,240,000 LINCOLN CORPORATION Consolidated Income Statement For Year Ended ($ thousands) 2020 2019 Revenues.... Less: Cost of goods sold $1,448,000 513,000 $1,200,000 420,000 Gross margin .... Less: Selling, general & administrative expenses 935,000 780,000 120,000 150,000 Operating income..... Gain on sale of investments .. 785,000 660,000 70,000 Net income before taxes. . . 660,000 11,000 855,000 .. Less: Income taxes. . . 50,000 Net income after taxes . . $ 805,000 $ 649,000 The footnotes to the Lincoln Corporation's financial statements revealed the following additional information: 1. Property and equipment costing $450 million was sold for its book value of $200 million. 2. Long-term investments were sold for $150 million, which included a gain of $70 million. Required Using the above financial data for the Lincoln Corporation, prepare the firm's statement of cash flow for 2020 using the indirect method. What does the company's statement of cash flow reveal about the business's aolth?
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter3: Financial Statements, Cash Flow, And Taxes
Section: Chapter Questions
Problem 19SP
Related questions
Question
The inventory decreased from year to year do you deduct or add for the
![PROBLEMS
TA 1, 2
Р3.22
Statement of Cash Flow.
Presented below are the financial statements for the Lincoln Corporation, as of
year-end 2020 and 2019.
omewo
MBC
LINCOLN CORPORATION
Consolidated Balance Sheets
As of Year-End
($ thousands)
2020
2019
Assets
Current
Cash.
2$
23,000
200,000
590,000
587,000
2$
90,000
Marketable securities
Accounts receivable (net) .
Inventory..
440,000
615,000
Total current assets
1,400,000
1,145,000
Noncurrent
Long-term investments
310,000
390,000
Property & equipment..
Less: Accumulated depreciation.
1,800,000
(500,000)
1,100,000
(500,000)
Property & equipment (net).
1,300,000
600,000
Intangibles (net)
95,000
105,000
Total noncurrent assets
1,705,000
1,095,000
Total assets
$3,105,000
$2,240,000
continued](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7b55d9eb-a210-4a86-9058-757d85203f7f%2Fd1ff7b2f-fc46-4ba0-9eb5-f365d427c088%2F3fbw75xl_processed.png&w=3840&q=75)
Transcribed Image Text:PROBLEMS
TA 1, 2
Р3.22
Statement of Cash Flow.
Presented below are the financial statements for the Lincoln Corporation, as of
year-end 2020 and 2019.
omewo
MBC
LINCOLN CORPORATION
Consolidated Balance Sheets
As of Year-End
($ thousands)
2020
2019
Assets
Current
Cash.
2$
23,000
200,000
590,000
587,000
2$
90,000
Marketable securities
Accounts receivable (net) .
Inventory..
440,000
615,000
Total current assets
1,400,000
1,145,000
Noncurrent
Long-term investments
310,000
390,000
Property & equipment..
Less: Accumulated depreciation.
1,800,000
(500,000)
1,100,000
(500,000)
Property & equipment (net).
1,300,000
600,000
Intangibles (net)
95,000
105,000
Total noncurrent assets
1,705,000
1,095,000
Total assets
$3,105,000
$2,240,000
continued
![Auto Zoom
119
As of Year-End
($ thousands)
2020
2019
Liabilities & Shareholders' Equity
Accounts payable
$ 890,000
$ 850,000
Short-term bank debt
190,000
Total liabilities...
1,080,000
850,000
Shareholders' equity
Common stock, $10 par value
Additional paid-in-capital.
Retained earnings...
$ 775,000
380,000
870,000
$ 675,000
300,000
415,000
Total shareholders' equity
2,025,000
1,390,000
Total liabilities & shareholders' equity
$3,105,000
$2,240,000
LINCOLN CORPORATION
Consolidated Income Statement
For Year Ended
($ thousands)
2020
2019
$1,448,000
513,000
$1,200,000
420,000
Revenues .
Less: Cost of goods sold
Gross margin ...
Less: Selling, general & administrative expenses
935,000
150,000
780,000
120,000
Operating income..
Gain on sale of investments.
785,000
70,000
660,000
Net income before taxes. .
855,000
50,000
660,000
11,000
Less: Income taxes. .
Net income after taxes
$ 805,000
$ 649,000
The footnotes to the Lincoln Corporation's financial statements revealed the following additional information:
1. Property and equipment costing $450 million was sold for its book value of $200 million.
2. Long-term investments were sold for $150 million, which included a gain of $70 million.
Required
Using the above financial data for the Lincoln Corporation, prepare the firm's statement of cash flow for
2020 using the indirect method. What does the company's statement of cash flow reveal about the business's
financial health?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7b55d9eb-a210-4a86-9058-757d85203f7f%2Fd1ff7b2f-fc46-4ba0-9eb5-f365d427c088%2Fs2ias3r_processed.png&w=3840&q=75)
Transcribed Image Text:Auto Zoom
119
As of Year-End
($ thousands)
2020
2019
Liabilities & Shareholders' Equity
Accounts payable
$ 890,000
$ 850,000
Short-term bank debt
190,000
Total liabilities...
1,080,000
850,000
Shareholders' equity
Common stock, $10 par value
Additional paid-in-capital.
Retained earnings...
$ 775,000
380,000
870,000
$ 675,000
300,000
415,000
Total shareholders' equity
2,025,000
1,390,000
Total liabilities & shareholders' equity
$3,105,000
$2,240,000
LINCOLN CORPORATION
Consolidated Income Statement
For Year Ended
($ thousands)
2020
2019
$1,448,000
513,000
$1,200,000
420,000
Revenues .
Less: Cost of goods sold
Gross margin ...
Less: Selling, general & administrative expenses
935,000
150,000
780,000
120,000
Operating income..
Gain on sale of investments.
785,000
70,000
660,000
Net income before taxes. .
855,000
50,000
660,000
11,000
Less: Income taxes. .
Net income after taxes
$ 805,000
$ 649,000
The footnotes to the Lincoln Corporation's financial statements revealed the following additional information:
1. Property and equipment costing $450 million was sold for its book value of $200 million.
2. Long-term investments were sold for $150 million, which included a gain of $70 million.
Required
Using the above financial data for the Lincoln Corporation, prepare the firm's statement of cash flow for
2020 using the indirect method. What does the company's statement of cash flow reveal about the business's
financial health?
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![Fundamentals Of Financial Management, Concise Edi…](https://www.bartleby.com/isbn_cover_images/9781337902571/9781337902571_smallCoverImage.jpg)
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
![Fundamentals Of Financial Management, Concise Edi…](https://www.bartleby.com/isbn_cover_images/9781337902571/9781337902571_smallCoverImage.jpg)
Fundamentals Of Financial Management, Concise Edi…
Finance
ISBN:
9781337902571
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning