For the Sears Company, provide a brief detail how the company remains open after burning through over $6 billion in cash over four years just to keep the doors open For the Disney statement, where is their cash coming from and where are they spending the cash? (What are the major uses of cash outside of operations.)

For the Sears Company, provide a brief detail how the company remains open after burning through over $6 billion in cash over four years just to keep the doors open For the Disney statement, where is their cash coming from and where are they spending the cash? (What are the major uses of cash outside of operations.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Company ABC is preparing its 2021 financial statements. At the end of 2021, the company purchased a building for $500,000 making a down payment of $200,000 cash and signing a $300,000 mortgage note. The president of Company ABC, Jackie Brown understand that debt transactions are considered a financing activity from a business perspective and also, that purchases of long-term assets are investing activities. Consequently, Jackie is pondering how to report this transaction on the statement of cash flows and has asked you as her accountant to look into the issue. Using the related GAAP, prepare a memo to the president that summarizes how to report this transaction on the State of Cash Flows
Indicate how you would expect the following strategies to affect the company’s net cash flows from operating activities (1) in the near future and (2) in later periods (after the strategy’s long-term effects have “taken hold”). Fully explain your reasoning. a. A successful pharmaceutical company substantially reduces its expenditures for research anddevelopment.b. A restaurant that previously sold only for cash adopts a policy of accepting bank credit cards,such as Visa and MasterCard.c. A manufacturing company reduces by 50 percent the size of its inventories of raw materials(assume no change in inventory storage costs).d. Through tax planning, a rapidly growing real estate developer is able to defer significantamounts of income taxes.e. A rapidly growing software company announces that it will stop paying cash dividends for theforeseeable future and will instead distribute stock dividends.
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One company had the following items in its “cash” account ad of december 31, 2022: Cash on handP150,000 Cash in abnk - unrestricted800,000 Cash restricted for additions to plant (to be disbursed in 2025)600,000 Bank certificates of deposit (acquired 12/25/2022; due in 4/1/2023)250,000 Cash in bank - to be used for payment of 2023 dividends300,000 How much should be reported as cash and cash equivalents as of December 31, 2022?
5. The president of Laporte Inc., Tanya Turcotte, was provided with a copy of the operating activities section of the statement of cash flows that you prepared in (1.), and made the following comment: “This report is supposed to show operating cash inflows and outflows during the year, but I don’t see how much cash Laporte Inc. received from customers and how much it paid to trade suppliers and for income taxes. Please ask whoever prepared this statement to provide me with these numbers.” Based on Tanya’s comment, compute the following amounts for 2020: (Enter your answers in millions.) a. Cash collected from customers b. Cash paid to trade suppliers c. Cash paid for income taxes
Melody Lane Music Company was started by John Ross early in 2021. Initial capital was acquired by issuing shares of common stock to various investors and by obtaining a bank loan. The company operates a retail store that sells records, tapes, and compact discs. Business was so good during the first year of operations that John is considering opening a second store. The funds necessary for expansion will come from a new bank loan. In order to approve the loan, the bank requires financial statements. A. Cash receipts consisted of the following: from customers $360,000, from issue of common stock $100,000, from bank loan $100,000 B. Cash disbursements were as follows: purchase odf inventory $300,000, rent $15,000, Salaries $30,000, Utilities $5,000, Insurance $3,000, Purchase of equipment $40,0000 C. The bank loan was made on March 31,2021. A note was signed requiring payment of interest and principle on March 31,2022. The interest rate is 12% D. The equipment was purchased on…
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Your friend is in business and wants your advice on preparing and interpreting the statement of cash flows for 2016. Information regarding the business is as follows: Cash received from customers $ 175,000 Cash paid to vendors 75,000 Cash paid to employees 140,000 Cash paid for interest 35,000 Depreciation expense 40,000 Cash paid in acquiring equipment 375,000 Cash received from issuing bonds 250,000 Cash received from issued common stock 400,000 Beginning cash balance 95,000 Required: a. Based upon the above information, prepare the statement of cash flows using the direct method. b. Explain what has happened during the year.
You have just been hired as a financial analyst for BarringtonIndustries. Unfortunately, company headquarters (where all of the firm’s records are kept)has been destroyed by fire. So, your first job will be to recreate the firm’s cash flow statementfor the year just ended. The firm had $100,000 in the bank at the end of the prioryear, and its working capital accounts except cash remained constant during the year. Itearned $5 million in net income during the year but paid $800,000 in dividends to commonshareholders. Throughout the year, the firm purchased $5.5 million of machinery thatwas needed for a new project. You have just spoken to the firm’s accountants and learnedthat annual depreciation expense for the year is $450,000; however, the purchase price forthe machinery represents additions to property, plant, and equipment before depreciation.Finally, you have determined that the only financing done by the firm was to issue longtermdebt of $1 million at a 6% interest rate. What was…
Which of these is a speculative motive for holding cash? A.Paying a $100 bonus to all employees at year-end B. Paying the annual insurance premium on the firm's assets C. Buying extra inventory because a key supplier offered a special one-time discount D. Needing to purchase a new delivery truck because the old one was totally destroyed in an accident
JUDLAH SERVICES LIMITED Judlah Services Limited has been trading for the past five years. Last year they have recently realized that they are experiencing frequent cash flow issues. Their financial accountant has suggested the tracking of the inflows and outflows of the company’s cash. The following information on revenue and costs were made available to you: Month Sales Purchases ($’000) ($’000) October 2020 1 400 000 1 137 500 November 2020 1 050 000 787 500 December 2020 1 575 000 1 312 500 January 2021 875 000 612 500 February 2021 1 050 000 787 500 March 2021 1 225 000 962 500 April 2021 1 050 000 787 500 Additional notes: The cash balance on January 01st 2021 was $262 500; 20% of sales is usually attributable to cash sales while the remainder is settled: One month after sales: 60%; Two months after sales: 20%. 2% of sales is allocated to Sales Expenses and is paid in the month of sale; 50% of cost…