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in the attached question I am unclear how you got the numbers listed below: Cash Flow from investing activities: purchase of marketable securities is $200k? Sale of long term investments is $150,000,000? Purchase of equipment is ??? Sale of Equipment is $200,000,000?   If added this whole section up it must total $1,000,000?   so how did you get 1150000 for ourchase of equipment?

in the attached question I am unclear how you got the numbers listed below: Cash Flow from investing activities: purchase of marketable securities is $200k? Sale of long term investments is $150,000,000? Purchase of equipment is ??? Sale of Equipment is $200,000,000?   If added this whole section up it must total $1,000,000?   so how did you get 1150000 for ourchase of equipment?

FINANCIAL ACCOUNTING
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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in the attached question I am unclear how you got the numbers listed below:

Cash Flow from investing activities:

purchase of marketable securities is $200k?

Sale of long term investments is $150,000,000?

Purchase of equipment is ???

Sale of Equipment is $200,000,000?  

If added this whole section up it must total $1,000,000?  

so how did you get 1150000 for ourchase of equipment?

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 $2,240,000 continued
Transcribed Image Text:PROBLEMS TA 1, 2 Р3.22 Statement of Cash Flow. Presented below are the financial statements for the Lincoln Corporation, as of year-end 2020 and 2019. omewo MBC LINCOLN CORPORATION Consolidated Balance Sheets As of Year-End ($ 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 $70 million. Required Using the above financial data for the Lincoln Corporation, prepare the firm's statement of cash flow for 2020 using the indirect method. What does the company's statement of cash flow reveal about the business's financial health?
Transcribed Image Text:Auto Zoom 119 As of Year-End ($ 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?
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Statement of cash flow is the once prepared by the company to depict the cash flows (inflow/outflow) from the business in a specific time from three kinds of activities namely: Operating, investing, and financing activities. 

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