Concept explainers
Videos
a.
To compute: The income statement and
Introduction: Income Statement’ shows the revenue earned and expenses incurred over a period of time. It is used to compute the net income for a particular period.
a.
Explanation of Solution
The income statement for the company has been prepared:
Working note: Preparation of income statement and computation of net income has been shown below:
The balance sheet for the company has been prepared:
Working note: Preparation of balance sheet has been shown below:
b.
To compute: Create a statement of cash flows for 2016.
Introduction: A cash flow statement shows the aggregate data regarding all the
b.
Explanation of Solution
The cash flow statement for the company has been prepared:
Working note: Preparation of cash flow statement and computation of net cash flow has been shown below:
c.
To show: Cash flow statement using outline feature.
Introduction: A cash flow statement shows the aggregate data regarding all the cash inflows and outflows of a company. It considers only cash transactions, any non-cash transaction is mentioned as a footnote.
c.
Explanation of Solution
Cash flow statement can be shown using outline feature as:
Steps to perform outline:
- Select the entire particulars column.
- Go to ‘Data’ tab.
- Click on sub-total.
- Select ‘Count’ as ‘Use function’.
- Click on ok.
Working note: The cash flow statement for the company has been prepared.
d.
To compute: If sales were $400000 instead of $3,69,300 in 2016 then compute the net income &
Introduction: Income Statement’ shows the revenue earned and expenses incurred over a period of time. It is used to compute the net income for a particular period.
d.
Explanation of Solution
The revised net income could be calculated by changing the net sales figure for 2016:
Retained earnings would change automatically as shown below:
Working notes:
Calculation of net income:
Computation of retained earnings:
If sales were $400000 instead of $3,69,300 in 2016 then net income is $33,405& retained earnings is $68,605.
e.
To compute: If tax rate was 35% instead of 40% in 2016 then compute the net income & retained earnings.
Introduction: Income Statement’ shows the revenue earned and expenses incurred over a period of time. It is used to compute the net income for a particular period.
e.
Explanation of Solution
The revised net income could be calculated by changing tax rate figure for 2016:
Calculated revised retained earnings:
Computation of revised net income:
Computation of retained earnings:
Want to see more full solutions like this?
Chapter 2 Solutions
EBK 3N3-EBK: FINANCIAL ANALYSIS WITH MI
- A worksheet approach to preparing the statement of cash flows a. is a useful aid. b. uses a spreadsheet format. c. offers an efficient and logical way of organizing the data. d. allows an easy extraction of the needed data. e. All of these.arrow_forwardGarage, Inc., has identified the following two mutually exclusive projects. a. What is the IRR for each project? b. If the required return is 11 percent, what is the NPV for each project? c. What is the crossover rate between these two projects? Year 0 Year 1 Year 2 Year 3 Year 4 Required return SSSSS A (43,500) 21,400 18,500 13,800 7,600 $ ESSASALA $ $ $ $ B (43,500) 6,400 14,700 22,800 25,200 11% Complete the following analysis. Do not hard code values in your calculations. You must use the built-in Excel functions to answer this question.arrow_forwardWhat is the purpose of the “changes” columns of a spreadsheet to prepare a statement of cash flows?arrow_forward
- Explain how a worksheet may be helpful in preparing a statement of cash flows.arrow_forwardHere is the complete worksheet I am working on for my homework. The blank spots I had to fill in are: Income statement: sales and costs of goods sold for 2018 Balance sheet was cash and net fixed assets for 2018 Cash flow statements were: depreciation, accounts receivable and accts payable Can you let me know if the information I have provided looks correct? I just want to make sure I am on the right track. Thank you! Income Statement For the year: 2016 2017 2018 Sales $ 120,000 $ 150,000 $ 180,000 Cost of Goods Sold $ 100,000 $ 120,000 Gross Profit $ 60,000 General, Selling, & Administrative Expense $ 50,000 Depreciation $ 8,500 Net Income $ 1,500 Balance Sheet For the year ending: 2017 2018 Assets Cash $…arrow_forwardshow calculations where neededarrow_forward
- Which of the following is the final step in preparing a spreadsheet (work sheet) for the statement of cash flows using the indirect method? Add the Debit and Credit Transactions columns and verify that the totals are equal. Analyze all noncash accounts and enter the net increase (decrease) in cash during the period. Add the Balance column totals, which should total to zero. After all noncash accounts have been analyzed, enter the net increase (decrease) in cash during the period.arrow_forwardHow would I input the formulas into excel to get those numbers for the statement of cash flowsarrow_forwardSpecify every aspect of the link between the income statement, the balance sheet, and the cash flow statement.arrow_forward
- Use a spreadsheet and the following financial information from Mineola Companys financial statements to build a template that automatically calculates the net operating cash flow. It should be suitable for use in preparing the operating section of the statement of cash flows (indirect method) for the year 2018.arrow_forwardwhat are the three sections for debits, credits, and total. Here is a picture with an empy cells for what it should look like. The blue cells should be from the chart of accountsarrow_forwardWhich of the following statements concerning the entries made on the spreadsheet used to prepare the statement of cash flows is true? a.The entries are not posted to the ledger. b.The entries are used in preparing the data on the spreadsheet. c.The entries are used in summarizing the data on the spreadsheet. d.All of these choices are correct.arrow_forward
Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
Managerial Accounting: The Cornerstone of Busines...AccountingISBN:9781337115773Author:Maryanne M. Mowen, Don R. Hansen, Dan L. HeitgerPublisher:Cengage Learning