Financial Accounting: Tools for Business Decision Making, 8th Edition
8th Edition
ISBN: 9781118953808
Author: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso
Publisher: WILEY
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Chapter 12, Problem 12.5E
To determine
Statement of
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.
Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.
- Deduct increase in current assets.
- Deduct decrease in current liabilities.
- Add decrease in current assets.
- Add the increase in current liability.
- Add
depreciation expense and amortization expense. - Add loss on sale of plant assets.
- Less gain on sale of plant assets.
Cash flow from investing activities: This section of cash flows statement provides information concerning about the purchase and sale of capital assets by the company.
- Deduct the amount of cash used to purchase any fixed assets.
- Add the amount of cash received from sale of any fixed asset.
Cash flow from financing activities: This section of cash flows statement provides information about the
- Add the amount of cash received from any sources of finance.
- Deduct the amount of cash used for payment for dividend and interest from financing activities.
- Deduct the amount of cash used for payment of
treasury stock from financing activities.
To Prepare: Statement of cash flows of A Company using indirect method.
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Students have asked these similar questions
Consider the following financial data for Terry Enterprises:
Balance Sheet as of December 31, 2018
Cash
$
86,000
Accounts payable
$
15,500
Accts. receivable
91,500
Notes payable
93,500
Inventories
65,500
Accruals
19,500
Total current assets
$
243,000
Total current liabilities
$
128,500
Long-term debt
162,500
Net plant & equip.
419,500
Common equity
371,500
Total assets
$
662,500
Total liab. & equity
$
662,500
Statement of Earnings for 2018
Industry Average Ratios
Net sales
$
642,500
Current ratio
2.2×
Cost of goods sold
482,000
Quick ratio
1.7×
Gross profit
$
160,500
Days sales outstanding
44 days
Operating expenses
119,500
Inventory turnover
6.7×
EBIT
$
41,000
Total asset turnover
0.6×
Interest expense
14,500
Net profit margin
7.2%
Pre-tax earnings
$
26,500…
Super Grocers, Inc. provided the following financial information for the quarter ending
September 30, 2016. Find the net cash flow from operating activites.
Depreciation and amortization: $133,414
Net Income: $341,463
Increase in receivables: $112,709
Increase in inventory: $81,336
Increase in accounts payables: $62,411
Decrease in marketable securities: $31,225
Issued new common stock: $3,500
O $343,243
○ $374,468
O $308,458
O $312,018
Consider the following financial data for Smith Corp.:
Balance Sheet as of December 31, 2019
Cash
$
195,000
Accounts payable
$
94,000
Receivables
185,500
Short-term bank note
119,500
Inventories
214,500
Accruals
71,000
Total current assets
$
595,000
Total current liabilities
$
284,500
Long-term debt
462,500
Net plant & equip.
621,500
Common equity
469,500
Total assets
$
1,216,500
Total liab. & equity
$
1,216,500
Profit & Loss Statement for 2019
Industry Average Ratios
Net sales
$
1,265,000
Current ratio
1.9×
Cost of sales
986,500
Quick ratio
1.2×
Gross profit
$
278,500
Days sales outstanding
64 days
Operating expenses
166,500
Inventory turnover
3.3×
EBIT
$
112,000
Total asset turnover
0.7×
Interest expense
32,000
Net profit margin
9.1%
Pre-tax income
$
80,000…
Chapter 12 Solutions
Financial Accounting: Tools for Business Decision Making, 8th Edition
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - Prob. 4QCh. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Why is it necessary to use comparative balance...Ch. 12 - Prob. 8QCh. 12 - Prob. 9QCh. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - Prob. 14QCh. 12 - Prob. 15QCh. 12 - Prob. 16QCh. 12 - Prob. 17QCh. 12 - Prob. 18QCh. 12 - Prob. 19QCh. 12 - Prob. 20QCh. 12 - Prob. 21QCh. 12 - Prob. 22QCh. 12 - Prob. 12.1BECh. 12 - Prob. 12.2BECh. 12 - Prob. 12.3BECh. 12 - Prob. 12.4BECh. 12 - Prob. 12.5BECh. 12 - Prob. 12.7BECh. 12 - Prob. 12.8BECh. 12 - Prob. 12.9BECh. 12 - Prob. 12.10BECh. 12 - Prob. 12.11BECh. 12 - The management of Uhuru Inc. is trying to decide...Ch. 12 - Prob. 12.13BECh. 12 - Prob. 12.14BECh. 12 - Prob. 12.15BECh. 12 - Prob. 12.1DIECh. 12 - Prob. 12.2ADIECh. 12 - Prob. 12.2BDIECh. 12 - Prob. 12.3DIECh. 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 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.4APCh. 12 - Prob. 12.5APCh. 12 - Prob. 12.6APCh. 12 - Prob. 12.7APCh. 12 - Prob. 12.8APCh. 12 - Prob. 12.9APCh. 12 - Prob. 12.10APCh. 12 - Prob. 12.11APCh. 12 - Prob. 12.12APCh. 12 - Prob. 12.1EYCTCh. 12 - Prob. 12.2EYCTCh. 12 - Prob. 12.3EYCTCh. 12 - Prob. 12.7EYCTCh. 12 - Prob. 12.8EYCTCh. 12 - Prob. 12.9EYCTCh. 12 - Prob. 12.1IFRSCh. 12 - Prob. 12.2IFRSCh. 12 - Prob. 12.3IFRS
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