Statement of cash flows 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. To prepare: The statement of cash flows using the direct method of presenting cash flows from operating activities.

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Atwater Chemicals produces an engine additive for machinery. The additive is produced by adding various ingredients to a petroleum-based lubricant. Atwater purchases the lubricant from two suppliers, Woodlawn Petroleum and Spokane Chemicals. The quality of the final product depends directly on the quality of the lubricant. If the lubricant is "off," Atwater has to dispose of the entire batch. Because all lubricant can be "off," Atwater uses a measure it calls the “yield,” which is computed as Yield = Good output ÷ Input where the output and input are both measured in barrels. As a benchmark, Atwater expects to get 12 barrels of good output for every 16 barrels of lubricant purchased for a yield of 75 percent (= 12 barrels of output ÷ 16 barrels of lubricant). Data on the two suppliers for the past year follow: Woodlawn Petroleum Spokane Chemicals Total Total inputs purchased (barrels) 5,760 3,600 9,360 Good output (barrels) 3,744 3,096 6,840 Average price (per barrel) $ 121.00 $…

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Chapter 16, Problem 16.4APR

To determine

Statement of cash flows

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.

To prepare: The statement of cash flows using the direct method of presenting cash flows from operating activities.

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Atwater Chemicals produces an engine additive for machinery. The additive is produced by adding various ingredients to a petroleum-based lubricant. Atwater purchases the lubricant from two suppliers, Woodlawn Petroleum and Spokane Chemicals. The quality of the final product depends directly on the quality of the lubricant. If the lubricant is "off," Atwater has to dispose of the entire batch. Because all lubricant can be "off," Atwater uses a measure it calls the “yield,” which is computed as Yield = Good output ÷ Input where the output and input are both measured in barrels. As a benchmark, Atwater expects to get 12 barrels of good output for every 16 barrels of lubricant purchased for a yield of 75 percent (= 12 barrels of output ÷ 16 barrels of lubricant). Data on the two suppliers for the past year follow: Woodlawn Petroleum Spokane Chemicals Total Total inputs purchased (barrels) 5,760 3,600 9,360 Good output (barrels) 3,744 3,096 6,840 Average price (per barrel) $ 121.00 $…

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Watko Entertainment Systems (WES) buys audio and video components for assembling home entertainment systems from two suppliers, Bacon Electronics and Hessel Audio and Video. The components are delivered in cartons. If the cartons are delivered late, the installation for the customer is delayed. Delayed installations lead to contractual penalties that call for WES to reimburse a portion of the purchase price to the customer. During the past quarter, the purchasing and delivery data for the two suppliers showed the following: Bacon Hessel Total Total purchases (cartons) 5,000 3,000 8,000 Average purchase price (per carton) $ 168 $ 184 $ 174 Number of deliveries 40 20 60 Percentage of cartons delivered late. 30% 15% 25% The Accounting Department recorded $241,800 as the cost of late deliveries to customers. Required: Assume that the average quality, measured by the percentage of late deliveries, and prices from the two companies will continue as in the past. Also…