Changes in Current Operating Assets and LiabilitiesPaneous Corporation's comparative balance sheet for current assets and liabilities was as follows:Dec. 31, Year 2 Dec. 31, Year 1Accounts receivable$39,490$31,590Inventory76,34065,150Accounts payable60,75045,410Dividends payable18,00024,000Adjust net income of $351,000 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.$ 353,250 X

Adjust net Income of $351,000 for changes in operating assets and liabilities to arrive at net cash…

Answered: Changes in Current Operating Assets and…

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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Changes in Current Operating Assets and Liabilities-Indirect Method Blue Circle Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 $17,200 $17,000 68,800 69,500 27,800 26,800 18,000 19,000 Adjust net income of $84,600 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. 84,100 X Accounts receivable Inventory Accounts payable Dividends payable Feedback Check My Work Once you have calculated the changes in the current operating assets and liabilities determine what impact those changes would have on cash. For example if accounts receivable has increased from last year to this year does that mean the company has collected more cash or less cash? If accounts payable has decreased does that mean the company has more cash or less cash?
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Cash Flows from (Used for) Operating Activities The net income reported on the income statement for the current year was $116,600. Depreciation recorded on store equipment for the yea amounted to $19,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End Beginning of Year of Year Cash $44,770 $40,740 Accounts receivable (net) 32,100 30,110 Merchandise inventory 43,830 45,830 Prepaid expenses 4,920 3,870 Accounts payable (merchandise creditors) 41,950 38,540 Wages payable 22,920 25,180 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from operating activities: Net income 116,600 Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation 19,200…
Assets: Cash Accounts receivable Inventories Total current assets Net fixed assets Total assets Liabilities and equity: Accounts payable Notes payable Total current liabilities Long-term debt Common stock Retained earnings Total common equity Total liabilities and equity $ $ $ $ $ $ $ 2015 200,000 864,000 2,000,000 3,064,000 6,000,000 9,064,000 1,400,000 1,600,000 3,000,000 2,400,000 3,000,000 664,000 3,664,000 9,064,000 2014 170,000 700,000 1,400,000 $2,270,000 5,600,000 $7,870,000 $ $1,090,000 1,800,000 $2,890,000 2,400,000 2,000,000 580,00 $2,580,000 $7,870,000 If a firm has EBIT = 1,350,000 and 40% Tax rate, calculate Free Cash Flow.
Question Content Area Fortune Corporation’s comparative balance sheet showed noncash current assets and liabilities as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $7,500 $5,200 Merchandise inventory 11,500 16,000 Accounts payable 4,300 5,200 Dividends payable 4,000 3,000 Adjust Year 2 net income of $65,000 for changes in current operating assets and liabilities to arrive at net cash flows from operating activities using the indirect method.$fill in the blank 1
The Cash and Accounts Receivable end-of-year balances for a company are provided below. Current Year Prior Year Cash $46,280 $35,600 Accounts receivable (net) 17,050 31,000 Based on this information, what is the amount and percentage of increase or decrease that would be shown with horizontal analysis? Enter a decrease using a minus sign before the amount and the percentage. Account Dollar Change Percent Change Cash $fill in the blank 1 fill in the blank 2 % Accounts Receivable $fill in the blank 4 fill in the blank 5 % increase,decrease
The following information is available from the current period financial statements: Net income $116,986 Depreciation expense 23,264 Increase in accounts receivable 14,950 Decrease in accounts payable 15,020 The net cash flow from operating activities using the indirect method is
Blue Circle Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $31,500 $26,500 Inventory 62,300 73,300 Accounts payable 12,300 10,500 Dividends payable 24,000 22,000 Adjust net income of $97,900 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.$fill in the blank 1
Cash Flows from (Used for) Operating Activities The income statement disclosed the following items for the year: Depreciation expense Gain on disposal of equipment Net income The changes in the current asset and liability accounts for the year are as follows: Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable Dividends payable Increase (Decrease) $5,700 (3,240) (1,220) (3,860) 1,220 850 $36,600 21,330 218,400 a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Us minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Hampton Company reports the following information for its recent calendar year. Selected Year-End Balance Sheet Data Accounts receivable increase $ 77,000 Inventory decrease 41,000 Salaries payable increase 12,000 4,000 $ 20,000 Income Statement Data Sales Expenses: Cost of goods sold Salaries expense Depreciation expense Net income Required: Prepare the operating activities section of the statement of cash flows using the indirect method. Note: Amounts to be deducted should be indicated with a minus sign. Statement of Cash Flows (partial) Cash flows from operating activities-indirect method Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash $ 5,000 5,000 900 Changes in current operating assets and liabilities
Formulating Financial Statements from Raw Data Following is selected financial information from Greenwood Industries, for its fiscal year ended ($ millions). Cash and cash equivalents, end of year Net cash from operations Net sales Stockholders' equity, end of year Cost of goods sold Net cash from financing Total liabilities, end of year Other expenses, including income taxes Noncash assets, end of year Net cash from investing Net income Effect of exchange rate changes on cash Cash and cash equivalents, beginning of year Net income Cost of goods sold REQUIRED a. Prepare an income statement, balance sheet, and statement of cash flows for Greenwood Industries. Note: Do not use negative signs with your answers in the Income Statement. Net cash flows from operations $2,516.7 5,514.3 26,439.9 14,411.2 Greenwood Industries Income Statement ($ millions) # 17,245.1 (2,912.3) 31,798.9 5,878.7 43,693.4 (729.3) 3,316.2 (31.1) 675.0 # # ♦ + ♦ + $ $ $ 0 0 0 0 0 Greenwood Industries Balance Sheet (5…
Statement of Cash Flows The comparative balance sheet of Orange Angel Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: Dec. 31, 20Y8 Dec. 31, 20Y7 Assets Cash $76,950 $94,390 Accounts receivable (net) 118,230 127,250 Merchandise inventory 168,910 157,720 Prepaid expenses 6,880 4,780 Equipment 344,060 282,580 Accumulated depreciation-equipment (89,460) (69,300) Total assets $625,570 $597,420 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $131,370 $124,860 Mortgage note payable 0 179,230 Common stock, $1 par 21,000 13,000 Excess of paid-in capital over par 304,000 168,000 Retained earnings 169,200 112,330 Total liabilities and stockholders’ equity $625,570 $597,420 Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows: Net income, $145,590. Depreciation…

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