Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN: 9781337395083
Author: Eugene F. Brigham, Phillip R. Daves
Publisher: Cengage Learning
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Textbook Question
Chapter 6, Problem 5P
Kendall Corners Inc. recently reported net income of $3.1 million and
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JBS Inc. recently reported net income of $4,650 and depreciation of $855. How much was its net cash flow, assuming it had no amortization expense and sold none of its fixed assets?
Group of answer choices
$5,786.75
$5,223.25
$5,505.00
$4,955.59
$4,701.31
Chic Chalk company has charged a depreciation of $500,120 for one of its equipment, on
its income statement. The company is planning for an increase in this depreciation. On the
financial statements of Chic Chalk this will
a. Decrease net cash flow from operations on the cash flow statement.
b. Not impact the cash flow statement
c. Increase in net cash flow from operations on the cash flow statement.
d. No impact the Income statement
Using the Exhibit below, assume that the depreciation expense on the Income Statement for the year was $38,000. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of depreciation expense on the Cash flow from operating activities section?
EXHIBIT
Increase
(Decrease)
Net Income (loss) $XXX
Adjustments to reconcile net income to net cash flow
from operating activities:
Depreciation of fixed assets XXX
Losses on disposal of assets XXX
Gains on disposal of assets (XXX)
Changes in current operating assets and liabilities:…
Chapter 6 Solutions
Intermediate Financial Management (MindTap Course List)
Ch. 6 - Prob. 2QCh. 6 - If a “typical” firm reports $20 million of...Ch. 6 - Prob. 4QCh. 6 - What is operating capital, and why is it...Ch. 6 - Explain the difference between NOPAT and net...Ch. 6 - Prob. 7QCh. 6 - Prob. 8QCh. 6 - Prob. 1PCh. 6 - Corporate bonds issued by Johnson Corporation...Ch. 6 - Prob. 3P
Ch. 6 - Talbot Enterprises recently reported an EBITDA of...Ch. 6 - Kendall Corners Inc. recently reported net income...Ch. 6 - In its most recent financial statements,...Ch. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - The Moore Corporation has operating income (EBIT)...Ch. 6 - The Berndt Corporation expects to have sales of 12...Ch. 6 - Prob. 12PCh. 6 - What effect did the expansion have on sales and...Ch. 6 - Prob. 2MCCh. 6 - Prob. 3MCCh. 6 - Prob. 4MCCh. 6 - What is Computron’s free cash flow (FCF)? What are...Ch. 6 - Calculate Computron’s return on invested capital...Ch. 6 - Cochran also has asked you to estimate Computrons...Ch. 6 - Prob. 8MCCh. 6 - Assume that a corporation has $100,000 of taxable...Ch. 6 - Prob. 10MC
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- H1.arrow_forward(a) The entity sold some tangible non-current assets, which had a net book value of $200 million. The cost of sales figure includes a loss of $10 million on this disposal. (b) Cost of sales is arrived at after charging depreciation on the tangible non-current assets of $42 million. (c) Dividends paid during the year were $55,000. Find cashflow from investing activitiesarrow_forwardRipley corporarion's accumulated depreciation - equipment account increased by 15325 while 3800 of patent amortization was recognized bewtween balance sheet dates. There were no purchases of sales of depreciation or intangible assets during the year. In addition the income statement showed a gain of 22420 from the salem of investments. Reconcile a net income of 286900 to net cash flow from operetatimg activitiesarrow_forward
- QUESTION 5 Below are relevant extracts from Pitzer Bhd's financial statements for the financial year ended 31 December 2020 and 31 December 2021: 2020 (RM) 2021 (RM) ASSETS: Freehold land Plant and machinery at cost Inventories Bank Tax recoverable 386,000 182,000 44,000 13,000 6,000 20,000 86,400 737,400 477,000 212,000 52,000 55,000 Fixed deposits Account receivables 27,000 97,200 920,200 LIABILITIES & EQUITIES Ordinary Share Capital General reserve Retained earnings 5% Bank loan Bank overdraft Account payables Tax payable Accumulated depreciation of Plant & Machinery 264,000 112,420 36,400 169,400 13,400 69,780 364,000 112,420 135,280 135,400 7,600 62,340 9,960 93,200 920,200 72,000 737,400arrow_forwardThe net income for Swifty Corporation for 2022 was $260,100. For 2022, depreciation on plant assets was $67,800, and the company incurred a loss on disposal of plant assets of $27,100. Compute net cash provided by operating activities under the indirect method, assuming there were no other changes in the company's accounts. (Show amounts that decrease cash flow with either a-sign eg.-15,000 or in parenthesis e.g. (15,000)) Ⓒarrow_forward1. Why does the company add back depreciation to compute net cash flows from operating activities? 2. Why are there changes in accounts receivable and inventories as adjustments to net earnings. Are accounts receivable and inventories balances increasing or decreasing during the year? 3. It is reported that the company invested $572 million in property, plant, and equipment. Is this an appropriate type of expenditure for the company to make? What relation should expenditures for PPE have with depreciation expense? 4. Stryker paid $300 million to repurchase its common stock in fiscal 2018 and, in addition, paid dividends of $703 million. Thus, it paid $1.003 million of cash to its stockholders during the year. How do we evaluate that use of cash relative to other possible uses for the company's cash? 5. Provide an overall assessment of the company's cash flows for fiscal 2018. In the analysis, consider the sources and uses of cash.arrow_forward
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