1.Calculate the operating section of cash flow using direct method2. Calculate the finance section of cash flow using the same information from the next page assuming that the cash dividend were paid3.calculate the Inventory turnover ratio with the information provided Genesis Corp.Income StatementFor Year Ended December 31, 2014S 590,000....$300,000Sales216,000Cost of goods sold.Wages and other operating expenses.Interest expense7,00015,00024,000(562,000)(6,000)Income taxes expenseDepreciation expense.Loss on sale of equipment16,000Gain on retirement of bonds2438,000Net income.Genesis Corp.Balance SheetDecember 31, 2014 and 201320142013AssetsCurrent assets:$ 17,000$ 12,000Cash60,00040,000Accounts recelvable84,00070,000Merchandise inventoryPrepaid expenses.Total current assets.Long-term assets:Property, plant and equipment.Less Accumulated depreciation.6,0004,000$167,000$126,000$250,000$210,000(60,000)5357,000(48,000)$288,000Total assets.LiabilitiesCurrent liabilities:$ 35,000$ 40,000Accounts payableInterest payable.Income taxes payable.Total current liabilitiesLong-term labilities:Bonds payable.3,0004,00022,000$ 60,00012,0005 56,00090,00064,000Total liabilities$150,000$120,000EquityContributed capital:Common shares$ 80,000Retained earningsTotal equity.Total liabilities and equity.$ 95,000112,000207,00088,000168,000$288,0005357.000

Under direct method; cash received from customer, cash paid to creditors for inventory, for…

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Business

Accounting

g the same infor

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

1.Calculate the operating section of cash flow using direct method

2. Calculate the finance section of cash flow using the same information from the next page assuming that the cash dividend were paid

3.calculate the Inventory turnover ratio with the information provided

Genesis Corp.
Income Statement
For Year Ended December 31, 2014
S 590,000
....
$300,000
Sales
216,000
Cost of goods sold.
Wages and other operating expenses.
Interest expense
7,000
15,000
24,000
(562,000)
(6,000)
Income taxes expense
Depreciation expense.
Loss on sale of equipment
16,000
Gain on retirement of bonds
2438,000
Net income.
Genesis Corp.
Balance Sheet
December 31, 2014 and 2013
2014
2013
Assets
Current assets:
$ 17,000
$ 12,000
Cash
60,000
40,000
Accounts recelvable
84,000
70,000
Merchandise inventory
Prepaid expenses.
Total current assets.
Long-term assets:
Property, plant and equipment.
Less Accumulated depreciation.
6,000
4,000
$167,000
$126,000
$250,000
$210,000
(60,000)
5357,000
(48,000)
$288,000
Total assets.
Liabilities
Current liabilities:
$ 35,000
$ 40,000
Accounts payable
Interest payable.
Income taxes payable.
Total current liabilities
Long-term labilities:
Bonds payable.
3,000
4,000
22,000
$ 60,000
12,000
5 56,000
90,000
64,000
Total liabilities
$150,000
$120,000
Equity
Contributed capital:
Common shares
$ 80,000
Retained earnings
Total equity.
Total liabilities and equity.
$ 95,000
112,000
207,000
88,000
168,000
$288,000
5357.000

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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