Accounting, Chapters 1-13
27th Edition
ISBN: 9781337272100
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 8, Problem 8.25EX
To determine
Cash and cash equivalents: Cash is the money readily available in the form of currency. Cash equivalents are the near-cash items, which are readily convertible into cash. Cash equivalents have a maturity period of three months, or less than 3 months.
To report: the reasons for reporting negative
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Mattel, Inc., designs, manufactures, and markets toy products worldwide. Mattel's toys include
Barbie® fashion dolls and accessories, Hot Wheels®, and Fisher-Price brands. For a recent
year, Mattel reported the following net cash flows from operating activities (in thousands):
$ (53,110)
First quarter ending March 31
Second quarter ending June 30
Third quarter ending September 30
Fourth quarter ending December 31
(187,663)
18,435
956,895
Explain why Mattel reported negative net cash flows from operating activi-
ties during the first and second quarters and a large positive cash flow for the fourth
quarter, with overall net positive cash flow for the year.
Compute Cash Conversion Cycle for Competing Firms
Kellogg’s Company and General Mills compete in the consumer packaged goods (CPG) sector. Refer to the following 2018 financial data for the two companies to answer the requirements.
$ millions
K
GIS
Total revenue
$14,575.0
$16,768.0
Cost of sales and services
9,849.0
10,312.9
Average accounts receivable
1,382.0
2,585.0
Average inventory
2,302.0
1,562.9
Average accounts payable
2,348.0
3,461.0
Note: Complete the entire question in Excel and format each answer to two decimal places. Then enter the answers into the provided spaces below with two decimal places.
a. Compute the following measures for both companies.
1. Days sales outstanding (DSO)
Company
DSO
K
Answer
GIS
Answer
2. Days inventory outstanding (DIO)
Company
DIO
K
Answer
GIS
Answer
3. Days payable outstanding (DPO)
Company
DPO
K
Answer
GIS
Answer
4. Cash conversion cycle (CCC)
Company…
The balance sheet of Computer World reports total assets of $350,000 and $450,000 at the beginning and end of the year, respectively. Sales revenues are
$800,000, net income is $100,000, and net cash flows from operating activities are $150,000. What is Computer World's cash return on assets?
Multiple Choice
37.5%
25.0%
33.3%
42.9%
Chapter 8 Solutions
Accounting, Chapters 1-13
Ch. 8 - Prob. 1DQCh. 8 - Why should the employee who handles cash receipts...Ch. 8 - Prob. 3DQCh. 8 - Why should the responsibility for maintaining the...Ch. 8 - Prob. 5DQCh. 8 - Prob. 6DQCh. 8 - The balance of Cash is likely to differ from the...Ch. 8 - Prob. 8DQCh. 8 - Prob. 9DQCh. 8 - (a) How are cash equivalents reported in the...
Ch. 8 - Internal control elements Identify each of the...Ch. 8 - Prob. 8.1BPECh. 8 - Prob. 8.2APECh. 8 - Prob. 8.2BPECh. 8 - Prob. 8.3APECh. 8 - Prob. 8.3BPECh. 8 - Prob. 8.4APECh. 8 - Prob. 8.4BPECh. 8 - Prob. 8.5APECh. 8 - Prob. 8.5BPECh. 8 - Sarbanes-Oxley internal control report Using...Ch. 8 - Prob. 8.2EXCh. 8 - Prob. 8.3EXCh. 8 - Prob. 8.4EXCh. 8 - Prob. 8.5EXCh. 8 - Prob. 8.6EXCh. 8 - Prob. 8.7EXCh. 8 - Prob. 8.8EXCh. 8 - Prob. 8.9EXCh. 8 - Prob. 8.10EXCh. 8 - Prob. 8.11EXCh. 8 - Entry for cash sales; cash short The actual cash...Ch. 8 - Entry for cash sales; cash over The actual cash...Ch. 8 - Internal control of cash payments Abbe Co. is a...Ch. 8 - Prob. 8.15EXCh. 8 - Prob. 8.16EXCh. 8 - Prob. 8.17EXCh. 8 - Prob. 8.18EXCh. 8 - Prob. 8.19EXCh. 8 - Prob. 8.20EXCh. 8 - Prob. 8.21EXCh. 8 - Prob. 8.22EXCh. 8 - Prob. 8.23EXCh. 8 - Prob. 8.24EXCh. 8 - Prob. 8.25EXCh. 8 - Cash to monthly cash expenses ratio El Dorado Inc....Ch. 8 - Prob. 8.27EXCh. 8 - Prob. 8.28EXCh. 8 - Prob. 8.1APRCh. 8 - Prob. 8.2APRCh. 8 - Prob. 8.3APRCh. 8 - Prob. 8.4APRCh. 8 - Prob. 8.5APRCh. 8 - Prob. 8.1BPRCh. 8 - Prob. 8.2BPRCh. 8 - Prob. 8.3BPRCh. 8 - Prob. 4BPRCh. 8 - Prob. 5BPRCh. 8 - Ethics in Action Tehra Dactyl is an accountant for...Ch. 8 - Ethics in Action During the preparation of the...Ch. 8 - Prob. 8.5CPCh. 8 - Prob. 8.6CPCh. 8 - Prob. 8.7CPCh. 8 - Prob. 8.8CPCh. 8 - Prob. 8.9CP
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