Theater by Design and Show Cinemas are asking you to recommend their stock to your clients. Because Theater by Design and Show Cinemas earn about the same net income and have similar financial positions, your decision depends on their statement of cash flows, summarized as follows:Based on their cash flows, which company looks better? Give your reasons. Theater by DesignShow CinemasNet Cash Provided by Operating ActivitiesCash Provided by (Used for) Investing Activities:Purchase of Plant AssetsSale of Plant AssetsCash Provided by (Used for) Financing Activities:Issuance of common stockPayment of long-term debt$ 30,000$ 70,000$ (100,000)10,000$ (20,000)(90,000)40,00020,00030,000(40,000)Net Increase (Decrease) in Cash$ 10,000$ 10,000

Cash flow statement: A financial statement that reflects on the cash position of an entity by…

Answered: Theater by Design Show Cinemas Net Cash…

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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Theater by Design and Show Cinemas are asking you to recommend their stock to your clients. Because Theater by Design and Show Cinemas earn about the same net income and have similar financial positions, your decision depends on their statement of cash flows, summarized as follows:

Based on their cash flows, which company looks better? Give your reasons.

Theater by Design
Show Cinemas
Net Cash Provided by Operating Activities
Cash Provided by (Used for) Investing Activities:
Purchase of Plant Assets
Sale of Plant Assets
Cash Provided by (Used for) Financing Activities:
Issuance of common stock
Payment of long-term debt
$ 30,000
$ 70,000
$ (100,000)
10,000
$ (20,000)
(90,000)
40,000
20,000
30,000
(40,000)
Net Increase (Decrease) in Cash
$ 10,000
$ 10,000

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