Concept explainers
a
Consolidated statement of cash flow: Consolidated entities, as with individual companies, must present a statement of cash flow when they issue a complete set of financial statements. A consolidated statement of
Cash flows statement is divided in to three parts, cash flows from operating activities, it explains source and uses of cash from ongoing regular business activity. Cash flow from financing activity showing Funds Company generated using finance in the business, and investing activity displays how much money has been used in or generated by making investments during specific time period.
the computation of cash received from customers.
b
Consolidated statement of cash flow: Consolidated entities, as with individual companies, must present a statement of cash flow when they issue a complete set of financial statements. A consolidated statement of cash flows is similar to a statement of cash flows prepared for an individual corporate entity and is prepared in same manner. Consolidated statement of cash flow is prepared after consolidated financial statement. Consolidated cash flow statement is prepared from the information in the three consolidated statements. When an indirect approach is used, consolidated net income must be adjusted for all items that affect consolidated net income and the cash of consolidated entity effectively.
Cash flows statement is divided in to three parts, cash flows from operating activities, it explains source and uses of cash from ongoing regular business activity. Cash flow from financing activity showing Funds Company generated using finance in the business, and investing activity displays how much money has been used in or generated by making investments during specific time period.
the computation of cash paid to suppliers.
c
Consolidated statement of cash flow: Consolidated entities, as with individual companies, must present a statement of cash flow when they issue a complete set of financial statements. A consolidated statement of cash flows is similar to a statement of cash flows prepared for an individual corporate entity and is prepared in same manner. Consolidated statement of cash flow is prepared after consolidated financial statement. Consolidated cash flow statement is prepared from the information in the three consolidated statements. When an indirect approach is used, consolidated net income must be adjusted for all items that affect consolidated net income and the cash of consolidated entity effectively.
Cash flows statement is divided in to three parts, cash flows from operating activities, it explains source and uses of cash from ongoing regular business activity. Cash flow from financing activity showing Funds Company generated using finance in the business, and investing activity displays how much money has been used in or generated by making investments during specific time period.
the computation the resulting operating cash flow.
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Chapter 10 Solutions
ADVANCED FINANCIAL ACCOUNTING-ACCESS
- Refer to the following financial statements for Crosby Corporation: CROSBY CORPORATIONIncome StatementFor the Year Ended December 31, 20X2 Sales $ 3,880,000 Cost of goods sold 2,620,000 Gross profit $ 1,260,000 Selling and administrative expense 656,000 Depreciation expense 300,000 Operating income $ 304,000 Interest expense 87,900 Earnings before taxes $ 216,100 Taxes 155,000 Earnings after taxes $ 61,100 Preferred stock dividends 10,000 Earnings available to common stockholders $ 51,100 Shares outstanding 150,000 Earnings per share $ 0.34 Statement of Retained EarningsFor the Year Ended December 31, 20X2 Retained earnings, balance, January 1, 20X2 $ 855,400 Add: Earnings available to common stockholders, 20X2 51,100 Deduct: Cash dividends declared and paid in 20X2 153,000 Retained earnings, balance, December 31, 20X2 $ 753,500 Comparative Balance SheetsFor 20X1 and…arrow_forwardTaft Technologies has the following relationships: annual sales $1,200,000 current liabilities $375,000 days sales outstanding(DSO)(360-day year) 40 Inventory Turnover Ratio 4.8 current ratio 1.2 The company's current assets consist of cash, inventories, and accounts receivable. How much cash does Taft have on its balance sheet, knowing also that the company's Cost of Goods Sold (including Depreciation) is 960,000 ? A. -$ 8,333 B. $ 116,667 C. $125,000 D. $200,000 E. $316,667arrow_forwardTaft Technologies has the following relationships: annual sales $1,200,000 current liabilities $375,000 days sales outstanding (DSO)(360-day year) 40 Inventory Turnover Ratio 4.8 current ratio 12 The company's current assets consist of cash, inventories, and accounts receivable. How much cash does Taft have on its balance sheet, knowing also that the company's Cost of Goods Sold (including Depreciation) is 460,000 ? A -$8,333 B. $116,667 C $125,000 D. $200,000 E $316,667arrow_forward
- The most recent financial statements for Alexander Co. are shown here: Income Statement Balance Sheet Sales $50,000 Current assets $78,300 Long-term debt $54,000 Costs 32,000 Fixed assets 43,200 Equity 67,500 Taxable income $18,000 Total $121,500 Total $121,500 Taxes (23%) 4,140 Net income $13,860 Assets and costs are proportional to sales. The company maintains a constant 36 percent dividend payout ratio and a constant debt-equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued?arrow_forwardThe most recent financial statements for Beckett Co. are shown here: INCOME STATEMENT BALANCE SHEET Sales $ 75,500 Current assets $ 21,000 Long-term debt $ 54,000 Costs 59,400 Fixed assets 148,000 Equity 115,000 Taxable income $ 16, 100 Total $ 169,000 Total $ 169,000 Taxes (22%) 3,542 Net income $ 12,558 Assets and costs are proportional to sales. The company maintains a constant 30 percent dividend payout ratio and a constant debt - equity ratio. What is the maximum increase in sales that can be sustained assuming no new equity is issued? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)arrow_forwardBalance sheet Cash Current liability Accounts receivable Long-term debt 120,000 Inventories Common stock Fixed assets Retained earnings 195,000 Total assets $ 600,000 Total liabilities and equity Sales Cost of good sold Current ratio:2.00 X Fixed assets turnover 3.00 X Inventory turnover 5.00 X Days sales outstanding 36.5 days Total assets turnover 1.5 X Gross profit margin on sales: = 30%arrow_forward
- Return on SalesThe following financial data is from Brenner Instruments' financial statements (thousands of dollars, except earnings per share.) (thousands of dollars, except earnings per share) Sales revenue $210,000 Cost of goods sold 125,000 Net income 8,300 Dividends 2,600 Earnings per share 4.15 BRENNER INSTRUMENTS, INC.Balance Sheet (Thousands of Dollars) Current Year Previous Year Assets Cash $18,300 $18,000 Accounts receivable (net) 46,000 41,000 Inventory 39,500 43,700 Total current assets 103,800 102,700 Plant assets (net) 52,600 50,500 Other assets 15,600 13,800 Total assets $172,000 $167,000 Liabilities and Stockholders' Equity Notes payable-banks $6,000 $6,000 Accounts payable 22,500 18,700 Accrued liabilities 16,500 21,000 Total current liabilities 45,000 45,700 9% Bonds payable 40,000 40,000 Total liabilities 85,000 85,700 Common stock, $25 par value (2,000,000 shares) 50,000 50,000…arrow_forwardQuick Ratio Gmeiner Co. had the following current assets and liabilities on December 31 of two recent years: Current Year Previous Year Current assets: Cash $ 486,000 $ 500,000 Accounts receivable 210,000 200,000 Inventory 375,000 350,000 Total current assets $1,071,000 $1,050,000 Current liabilities: Current portion of long-term debt $ 145,000 $ 110,000 Accounts payable 175,000 150,000 Accrued and other current liabilities 260,000 240,000 Total current liabilities $ 580,000 $ 500,000 a. Determine the quick ratio for December 31 of both years. If required, round your answers to one decimal place. Quick Ratio Previous year: fill in the blank 1 Current year: fill in the blank 2 b. How did the quick ratio change between the two balance sheet dates? Which statement below describes the change between the two balance sheet dates?arrow_forwardThe balance sheet for Revolution Clothiers is shown below. Sales for the year were $3,190,000, with 75 percent of sales sold on credit. REVOLUTION CLOTHIERS Balance Sheet 20X1 Assets Cash Accounts receivable Inventory Plant and equipment Total assets $ 24,000 283,000 266,000 450,000 a. Current ratio b. Quick ratio c. Debt-to-total-assets ratio d. Asset turnover e. Average collection period $ 1,023,000 Accounts payable Accrued taxes Liabilities and Equity times times % times days Bonds payable (long-term) Common stock Paid-in capital Retained earnings Total liabilities and equity Compute the following ratios: Note: Use a 360-day year. Do not round intermediate calculations. Round your answers to 2 decimal places. Input your debt-to- total assets answer as a percent rounded to 2 decimal places. $ 279,000 107,000 130,000 100,000 150,000 257,000 $ 1,023,000arrow_forward
- The most recent financial statements for Bello Co. are shown here: Income Statement Balance Sheet Sales $ 20,500 Current assets $ 12,020 Debt $ 16,660 Costs 14,100 Fixed assets 33,300 Equity 28,660 Taxable income $ 6,400 Total $ 45,320 Total $ 45,320 Taxes (21%) 1,344 Net income $ 5,056 Assets and costs are proportional to sales. Debt and equity are not. The company maintains a constant 30 percent dividend payout ratio. What is the internal growth rate? (Do not round intermediate calculations and enter your answer as a percent rounded 2 decimal places, e.g., 32.16.)arrow_forwardThe balance sheet for Revolution Clothiers is shown below. Sales for the year were $3,520,000, with 75 percent of sales sold on credit. Assets Cash Accounts receivable Inventory Plant and equipment Total assets REVOLUTION CLOTHIERS Balance Sheet 20X1 a. Current ratio b. Quick ratio c. Debt-to-total-assets ratio d. Asset turnover e. Average collection period $ 43,000 318,000 284,000 525,000 $ 1,170,000 Accounts payable Accrued taxes Liabilities and Equity times times % times days Bonds payable (long-term) Common stock Paid-in capital Retained earnings Total liabilities and equity Compute the following ratios: Note: Use a 360-day year. Do not round intermediate calculations. Round your answers to 2 decimal places. Input your debt-to- total assets answer as a percent rounded to 2 decimal places. $ 243,000 175,000 194,000 100,000 150,000 308,000 $ 1,170,000arrow_forwardsarrow_forward
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