Intermediate Accounting, Student Value Edition (2nd Edition)
2nd Edition
ISBN: 9780134732145
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
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Chapter 22, Problem 22.3E
a.
To determine
Cash flow from operating activities of AFI under indirect method.
b.
To determine
Cash flow from operating activities of AFI under direct method.
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The following data were taken from the comparative balance sheet of Osborn Sisters Company for the years ended December 31, 20Y9 and December 31, 20Y8:
Dec. 31, 20Y9
Dec. 31, 20Y8
Cash
$295,200
$218,900
Temporary investments
315,000
239,800
Accounts and notes receivable (net)
289,800
261,300
Inventories
405,000
324,000
Prepaid expenses
345,000
126,000
Total current assets
$1,650,000
$1,170,000
Accounts payable
$290,000
$315,000
Accrued liabilities
210,000
135,000
Total current liabilities
$500,000
$450,000
Selected current year-end financial statements of Cabot Corporation follow. (All sales were on credit; selected balance sheet amounts
at December 31 of the prior year were inventory, $55,900; total assets, $189,400; common stock. $87,000, and retained earnings,
$29,103.)
Assets
Cash
Short-term investments
Accounts receivable, net
Merchandise inventory
Prepaid expenses
Plant assets, net
Total assets
CABOT CORPORATION
Income Statement
For Current Year Ended December 311
$455,600
298,450
157,150
99,000
4,400
53,758
21,653
$ 32,097
Sales
Cost of goods sold i
Gross profit
Operating expenses
Interest expense
Income before taxes
Income tax expense.
Net income
CABOT CORPORATION
Balance Sheet
December 31 of current year
Liabilities and Equity
$10,000
Accounts payable
8,600
Accrued wages payable
30,400 Income taxes payable:
40,150 Long-term note payable, secured by mortgage on plant assets
2,550 Common stock
148,300
Retained earnings
$ 240,000
Total liabilities and equity
$ 17,500
5,000
3,900…
The following data were taken from the comparative balance sheet of Osborn Sisters Company for the years ended December 31, 2019 and December 31, 20Y8:
Dec. 31, 20Y9
Dec. 31, 20YS
Cash
$337,500
$254,100
Temporary investments
360,200
278,400
Accounts and notes receivable (net)
331,300
303,500
Inventories
463,100
376,200
Prepaid expenses
173,900
107,800
Total current assets
$1,666.000
$1,320,000
Accounts payable
$284,200
$308.000
Accrued liabilities
205,800
132,000
Total current Fabilities
$490,000
$440,000
a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.
20Y9
20Y8
%24
Working capital
Current ratio
Quick ratio
Chapter 22 Solutions
Intermediate Accounting, Student Value Edition (2nd Edition)
Ch. 22 - Prob. 22.1QCh. 22 - Prob. 22.2QCh. 22 - Prob. 22.3QCh. 22 - Prob. 22.4QCh. 22 - Prob. 22.5QCh. 22 - How do firms reclassify gains and losses on the...Ch. 22 - Prob. 22.7QCh. 22 - Prob. 22.8QCh. 22 - Prob. 22.9QCh. 22 - Prob. 22.10Q
Ch. 22 - Prob. 22.11QCh. 22 - What approach is used in preparing the operating...Ch. 22 - Under the indirect method, do firms subtract bond...Ch. 22 - Do firms subtract pension expense from net income...Ch. 22 - Prob. 22.15QCh. 22 - Prob. 22.16QCh. 22 - Prob. 22.1MCCh. 22 - Prob. 22.2MCCh. 22 - Big Dollars Corporation's comparative financial...Ch. 22 - Prob. 22.4MCCh. 22 - Prob. 22.5MCCh. 22 - Sykes Corporation's comparative balance sheets at...Ch. 22 - Prob. 22.7MCCh. 22 - Prob. 22.8MCCh. 22 - Prob. 22.1BECh. 22 - Prob. 22.2BECh. 22 - Prob. 22.3BECh. 22 - Prob. 22.4BECh. 22 - Prob. 22.5BECh. 22 - Prob. 22.6BECh. 22 - Prob. 22.7BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.9BECh. 22 - Prob. 22.10BECh. 22 - Prob. 22.11BECh. 22 - Prob. 22.12BECh. 22 - Prob. 22.13BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.15BECh. 22 - Prob. 22.16BECh. 22 - Prob. 22.17BECh. 22 - Prob. 22.18BECh. 22 - Prob. 22.19BECh. 22 - Prob. 22.20BECh. 22 - Prob. 22.21BECh. 22 - Prob. 22.22BECh. 22 - Complex Transactions, Acquisitions and...Ch. 22 - Prob. 22.24BECh. 22 - Prob. 22.25BECh. 22 - Complex Transactions, Change in Accounts...Ch. 22 - Prob. 22.1ECh. 22 - Prob. 22.2ECh. 22 - Prob. 22.3ECh. 22 - Prob. 22.4ECh. 22 - Prob. 22.5ECh. 22 - Prob. 22.6ECh. 22 - Statement of Cash Flows, Indirect Method,...Ch. 22 - Prob. 22.8ECh. 22 - Prob. 22.9ECh. 22 - Prob. 22.10ECh. 22 - Statement of Cash Flows, Indirect Method....Ch. 22 - Prob. 22.15ECh. 22 - Prob. 22.16ECh. 22 - Prepare Statement of Cash Flows, Direct Method....Ch. 22 - Prob. 22.2PCh. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Prob. 22.11PCh. 22 - Prob. 22.12PCh. 22 - Prob. 22.13PCh. 22 - Statement of Cash Flows, Direct Method, Complex...Ch. 22 - Prob. 1JCCh. 22 - Prob. 1FSCCh. 22 - Prob. 1SSCCh. 22 - Surfing the Standards Case 2: Cash Flow per Share...Ch. 22 - Basis for Conclusions Cases Basis for Conclusions...Ch. 22 - Basis for Conclusions Case 2: Indirect versus...
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