Financial Accounting
9th Edition
ISBN: 9781259738692
Author: Libby
Publisher: MCG
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Question
Chapter 12, Problem 12.15E
1.
To determine
Compute the
2.
To determine
Compute the quality of income ratio.
3.
To determine
Explain the major reason for the quality of income ratio not being equal to one for Company P.
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Salud Company reports the following information.
Selected Annual Income Statement Data
Selected Year-End Balance Sheet Data
Net income
$ 470,000
Accounts receivable increase
$ 49,600
Depreciation expense
97,000
Prepaid expenses decrease
15,900
Gain on sale of machinery
26,900
Accounts payable increase
7,400
Wages payable decrease
2,100
Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31.
Note: Amounts to be deducted should be indicated with a minus sign.
Salud Company reports the following information.
Selected Annual Income Statement Data
Selected Year-End Balance Sheet Data
$ 500,000 Accounts receivable increase
97,500 Prepaid expenses decrease
26,600 Accounts payable increase
Wages payable decrease
$ 53,200
12,600
Net income
Depreciation expense
Gain on sale of machinery
7,200
3,500
Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31.
(Amounts to be deducted should be indicated with a minus sign.)
Statement of Cash Flows (partial)
es
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Changes in current operating assets and liabilities
ed information
[The following information applies to the questions displayed below.]
A recent annual report for BubbliCo contained the following information for the period (dollars in millions):
Net income
Depreciation and amortization
Increase in accounts receivable
Increase in inventory
Increase in prepaid expense
Increase in accounts payable
Decrease in taxes payable
Increase in other current liabilities
Cash dividends paid
Share repurchases
BUBBLICO
Statement of Cash Flows (Partial)
$5,144
1,551
569
362
Cash flows from operating activities:
Required:
1. Compute cash flows from operating activities for BubbliCo using the indirect method.
Note: List cash outflows as negative amounts. Enter your answers in millions.
68
727
199
743
Adjustments to reconcile net income to cash flow from operating activities:
2,559
4,721
$
0
Chapter 12 Solutions
Financial Accounting
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Compare the two methods of reporting cash flows...Ch. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - What are noncash investing and financing...Ch. 12 - Prob. 13QCh. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - Prob. 8MCQCh. 12 - Prob. 9MCQCh. 12 - Prob. 10MCQCh. 12 - Prob. 12.1MECh. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Prob. 12.3MECh. 12 - Prob. 12.4MECh. 12 - Prob. 12.5MECh. 12 - Prob. 12.6MECh. 12 - Prob. 12.7MECh. 12 - Prob. 12.1ECh. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - (Chapter Supplement B) Computing and Reporting...Ch. 12 - During the period, Sanchez Company sold some...Ch. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - (Chapter Supplement A) Reporting and Interpreting...Ch. 12 - Prob. 12.23ECh. 12 - Prob. 12.24ECh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - (Chapter Supplement C) Preparing a Statement of...Ch. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.1CONCh. 12 - Prob. 12.1CPCh. 12 - Prob. 12.2CPCh. 12 - Prob. 12.3CPCh. 12 - Prob. 12.4CPCh. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CP
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