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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
in the attached question I am unclear how you got the numbers listed below:
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 $1,000,000?
so how did you get 1150000 for ourchase of equipment?
Transcribed Image Text:PROBLEMS
TA 1, 2
Р3.22
Statement of Cash Flow.
Presented below are the financial statements for the Lincoln Corporation, as of
year-end 2020 and 2019.
omewo
MBC
LINCOLN CORPORATION
Consolidated Balance Sheets
As of Year-End
($ 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
$2,240,000
continued
Transcribed Image Text:Auto Zoom
119
As of Year-End
($ 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
Step 1
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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