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Below are approximate amounts related to cash flow information reported by five companies in previous years.
1. Kraft Foods reports operating
2. Sara Lee reports operating cash flows of $1.4 billion, investing cash flows of –$0.3 billion, and financing cash flows of –$1.4 billion. If the beginning cash amount is $0.7 billion, what is the ending cash amount?
3. Performance Food Group reports operating cash flows of $0.07 billion, investing cash flows of $0.63 billion, and a change in total cash of $0.04 billion. What is the amount of cash flows from financing activities?
4. Smithfield Foods reports operating cash flows of $0.60 billion, financing cash flows of $0.42 billion, and a change in total cash of $0.02 billion. What is the amount of cash flows from investing activities?
5. Tyson Foods reports investing cash flows of –$1.42 billion, financing cash flows of $1.03 billion, and a change in total cash of $0.02 billion. What is the amount of cash flows from operating activities?
Required:
Calculate the answer to each.
1.
Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.
To Calculate: The amount of change in the total cash of K Foods.
Answer to Problem 1.17E
The amount of change in the total cash of K Foods is $2.8 billion.
Explanation of Solution
Calculate the amount of change in the total cash of K Foods.
Thus, the amount of change in the total cash of K Foods is $2.8billion.
2.
Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash, and result of these transactions is reported as ending balance of cash at the end of reported period.
To Calculate: The ending cash amount of Company SL.
Answer to Problem 1.17E
The ending cash amount of Company SL is $0.4 billion.
Explanation of Solution
Calculate the ending cash amount of Company SL, using the Statement of cash flow.
| Company SL | ||
| Statement of Cash Flows | ||
| Particulars | Amount ($) | Amount ($) |
| Net cash flows from operating activities | $1,400,000,000 | |
| Net cash flows from investing activities | ($300,000,000) | |
| Net cash flows from financing activities | ($1,400,000,000) | |
| Net decrease in cash | ($300,000,000) | |
| Opening Cash Balance | $700,000,000 | |
| Closing Cash Balance | $400,000,000 | |
Thus, the ending cash amount of Company SL is $0.4 billion.
3.
Financing activities: Financing activities refer to the activities carried out by a company to mobilize funds to carry out the business activities. The examples for financing activities are purchase of bonds, issuance of common shares, and others.
To Calculate: The net amount of cash flows from financing activities, of PF Group.
Answer to Problem 1.17E
The net amount of cash flows from financing activities, of PF Group is $0.66 billion.
Explanation of Solution
Calculate the net amount of cash flows from financing activities, of PF Group.
Thus, the net amount of cash flows from financing activities, of PF Group is $0.66 billion.
4.
Investing activities: Investing activities refer to the activities carried out by a company for acquisition of long term assets. The examples for investing activities are purchase of equipment, long term investment, sale of land, and others.
To Calculate: The net amount of cash flows from investing activities, of S Foods.
Answer to Problem 1.17E
The net amount of cash flows from investing activities, of S Foods is $1 billion.
Explanation of Solution
Calculate the net amount of cash flows from investing activities, of S Foods.
Thus, the net amount of cash flows from investing activities, of S Foods is $1 billion.
5.
Operating activities: Operating activities refer to the normal activities of a company to carry out the business. The examples for operating activities are purchase of inventory, payment of salary, sales, and others.
To Calculate: The net amount of cash flows from operating activities, of T Foods.
Answer to Problem 1.17E
The net amount of cash flows from operating activities, of T Foods is $0.41 billion.
Explanation of Solution
Calculate the net amount of cash flows from operating activities, of T Foods.
Thus, the net amount of cash flows from operating activities, of T Foods is $0.41 billion.
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Chapter 1 Solutions
Financial Accounting
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