Prepare a memo explaining how net income could be positive and operating cash flows is negative. Include in your report the calculation of operating cash flows of negative $5 million using the indirect method.
Q: compute missing amounts from the financial statement total change in cash=$25,600; net operating…
A: Statement of cash flows is the one prepared by the company to determine the cash movement from the…
Q: Need to compute cash flows from operating activities for each case using the direct method. I need…
A: working notes: Cash received from customer's= $74,000+1,000=75,000 64,000+4,900=68,900…
Q: If a business decides to switch from the indirect method to the direct method for reporting cash…
A: Cash Flows Statement - Cash Flow Statement shows the movement of Cash in the company for the…
Q: Instructions: Answer the following. i. Highlight all the mistakes if any in the above cash flows…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: Under the indirect method of preparing the operating section of the statement of cash flows, net…
A: The cash flow statement is part of the financial statements of the company. It is prepared at the…
Q: Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the…
A: Statement of cash flows: This statement reports all the cash transactions which are responsible for…
Q: 1. Using the direct method rather than the indirect method of preparing the statement of cash flows…
A: Statement of cash flows is one of a financial statement which is used by the stakeholders, like…
Q: Please answer the following questions: What is the principal disadvantage of the direct method of…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: For the current year, Packers Company decided to switch from the indirect method to the direct…
A: Statement of cash flows: The statement of cash flows records all the sources and use of the cash in…
Q: According to the information given in the table below, which of the following is cash flow from…
A: Information Net income 101,000 Deprecation 35,000 Decrease in Accounts…
Q: If a company changes from offering 30 days' credit to customers to offering 50 days credit, which of…
A: SOLUTION- CREDIT TO CUSTOMER- IT MEANS TO WHOM TMC ALLOWS CREDIT IN RESPECT OF GOODS PURCHASED OR…
Q: For each of the following transactions, indicate whether operating (O), investing (I), or…
A: Cash flow statement is a part of financial statement which represents the cash flow in and out the…
Q: According to the information given in the table below, which of the following is cash flow from…
A: Cash flows from operating activities: It is a section of Statement of cash flow that explains the…
Q: Information for two companies in the same industry, Kingbird Inc. and Oriole Company, is presented…
A: working Free cash flow formula = Net cash provided by operating activities - Capital expenditures…
Q: Provide the missing piece of information for the following statement of cash flows puzzle. Cash…
A: Cash flow statement represents the cash inflow and cash outflow of the company.
Q: If a gain of $8,187 is realized in selling (for cash) office equipment having a book value of…
A: Cash flow statement is prepared to analyze the cash inflows and outflows in the business during a…
Q: Kennedy, Inc. reported the following data: Net income $177,553 Depreciation expense 16,482 Loss on…
A: The cash flow statement records all the cash inflow and cash outflow during particular periods. It…
Q: Reconstruct the company’s comparative balance sheet for 2020/2021 using the information and compute…
A: As per our protocol we provide solution to the one question only but as you have asked two questions…
Q: The records of Vintage Color Engraving reveal the following: E (Click the icon to view the records.)…
A: Cash flow from operating activities mainly covers business activities like manufacturing, selling or…
Q: Kennedy, Inc. reported the following data: Net income $154,003 Depreciation expense 16,628 Loss on…
A: The cash flows statement gives information on all the cash receipts and payments of the business.…
Q: Use the following income statement and balance sheet information to put together a statement of cash…
A: The cash flow statement is one of the important financial statements of the business, which keeps…
Q: How many of these items would be subtracted from net income to prepare the operating activities…
A: The cash flow statement is part of the financial statements of the company. It is prepared at the…
Q: Calculate net cash flows from operating activities using the indirect method. (List cash outflows…
A: Given information is: Laser World reports net income of $470,000. Depreciation expense is $32,000,…
Q: The following information has been provided to you by RKJ Company: Net income $ 310,500…
A: Cash flows from operating activities: It is a section of Statement of cash flow that explains the…
Q: Nathan Herrmann has completed the basic format to be used in preparing the statement of cash flows…
A: A cash flow statement is divided into three sections- Operating, Investing, and Financing. Operating…
Q: When a company reports negative net cash flows from operations _____. a.ratio of accounts payable…
A:
Q: The income statement and additional data of Healthy Living Plus, Inc. follows: Prepare Healthy…
A: Cash flow statement: It is a statement which reports the cash inflows and outflows of a business…
Q: Kennedy, Inc. reported the following data: Net income $139,775 Depreciation expense 14,898 Loss on…
A: Cash flow statement is a statement which is prepared to find out the cash comes in and goes out , by…
Q: Match (by letter) the following items with the description or example that best fits. Each letter is…
A:
Q: Accountants for Morston, Inc. have assembled the following data for the year ended December 31,…
A: Cash flow statements includes: Cash flows from Operating activities Cash flows from Investing…
Q: Accountants for Morganson,Inc. have assembled the following data for the year ended December 31,…
A: Cash Flow Statement is a statement that records cash inflows and outflows of a business.
Q: Instructions: Answer the following. i. Highlight all the mistakes if any in the above cash flows…
A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…
Q: If a loss of R.O.5,000 is incurred in selling (for cash) office equipment having a book value of…
A: The investing activities section of the cash flow statement shows the amount of cash outflow for…
Q: For the most recent year, Virtual Gaming Systems had net income of $560,000. The accounting records…
A: Noncash expenses are added. Increase in assets / decrease in liabilities is subtracted. Decrease in…
Q: If a gain of $8,077 is realized in selling (for cash) office equipment having a book value of…
A: The cash flow statement includes the amount of cash received or paid.
Q: Can a company report negative net cash flows from operating activities for the year on the statement…
A: A Cash flow statement is a part of financial statement which summarizes that amount of cash entering…
Q: 1. Can you show your solution? Easter Company provided the following data for the preparation of…
A: Cash from operating activities = net income + non cash expenses- non operating income + increase in…
Q: In the course of preparing a company's statement of cash flows, the following figures are to be…
A: We have the following information: Depreciation Charges: $980,000 Profit on sale of non-current…
Q: Can a company report negative net cash flows from operating activities for the year on the statement…
A: cash Flow Statement is a Statement which shows the movement of cash during the period, the cash flow…
Q: Some transactions that don't increase or decrease cash must be reported inconjunction with a…
A: These kinds of transactions are still shown on the financial statement of one company.
Q: The net income for the year for Genesis, Inc. is $750,000, but the statement of cash flows reports…
A: Lets start with basic understanding of both the term i.e. net income and cashflow from operating…
Q: Shee October 31, 2020, and 2021 2021 2020 Assets Cash and cash equivalent 450,000 385,400 185,000…
A:
Q: Blossom Company reported net income of $1.75 million in 2022. Depreciation for the year was…
A:
Prepare a memo explaining how net income could be positive and operating cash flows is negative. Include in your report the calculation of operating cash flows of negative $5 million using the indirect method.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Profit and Loss Account for the year ended 31st December 2021 (Figures are in £000) Particulars XYZ ABC Sales 3,690 4,586 Less: Cost of Goods Sold (Including purchases) (2,146) (2,690) Gross Profit 1,544 1,896 Less: Selling & Distribution Expenses Less: Depreciation (1,103) (1,253) Earnings before Interest & Tax or Operating Profit 441 643 Less: Interest (225) (192) Earnings before Tax 216 451 Less: Taxes (86) (180) Earnings after Tax or Net Profit 130 271 Balance Sheet as at31st December 2021 (Figures are in £000) Assets XYZ ABC Fixed Assets 4,542 4,790 Current Assets Account Receivables 274 313 Inventory 654 702 Cash 140 163 Total Current Assets 1,068 1,178 Total Assets 5,610 5,968 Liabilities Capital 3,824 4,310 Long Term Debt 883 760 Current Liabilities Account Payables…Assets Cash Debt investments (short-term) Accounts receivable (net) Inventory Prepaid expenses Land Priscoll Company Balance Sheets December 31 Building and equipment (net) Total assets Liabilities and Stockholders' Equity Notes payable (current) Accounts payable Accrued liabilities Bonds payable, due 2025 Common stock, $10 par Retained earnings Total liabilities and stockholders' equity 2022 $ 70,000 55,000 104,000 230,000 25,000 130,000 260,000 $874,000 $170,000 65,000 40,000 250,000 200,000 149,000 $874,000 2021 $ 65,000 40,000 90,000 165,000 23,000 130,000 185,000 $698,000 $120,000 52,000 40,000 170,000 200,000 116,000 $698,000Use the information above to calculate cash flows from operating activities using the indirect method. Note: Amounts to be deducted should be indicated by a minus sign. Cash flows from operating activities Net income Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilities $ 42,000 S 42.000 42.000
- MOSS COMPANY Selected Balance Sheet Information December 31, 2019 and 2018 2019 2018 Current assets $84,650 25,000 60, 000 $26,800 32,000 54,100 Cash Accounts receivable ed Inventory Current liabilities Accounts payable Income taxes payable 25,700 2,200 30,400 2,e5e MOSS COMPANY Income Statement For Year Ended December 31, 2019 ces Sales $ 515,000 331,6ее 183,400 Cost of goods sold Gross profit Operating expenses Depreciation expense Other expenses Income before taxes $ 36,000 121,500 157, 500 25,900 7,700 $ 18,200 Income taxes expense Net income *........... ....... lA firm has been experiencing low profitability in recent years. Perform an analysis of the firm's financial position using the DuPont equation. The firm has no lease payments but has a $3 million sinking fund payment on its debt. The most recent industry average ratios and the firm's financial statements are as follows: Industry Average Ratios Current ratio Debt-to-capital ratio Times interest earned EBITDA coverage Inventory turnover Cash and equivalents Accounts receivables Inventories Total current assets 2x 17% 3 x 6 x 11 x Days sales outstandinga Calculation is based on a 365-day year. Balance Sheet as of December 31, 2021 (millions of dollars) $78 Accounts payable Other current liabilities 51 125 Notes payable $ 254 Total current liabilities Long-term debt Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity Gross fixed assets Less depreciation Net fixed assets Total assets 15 days Fixed assets turnover Total assets turnover…Total Net Fixed Assets Total Assets O 14.97 siven, O 16.05 O 9.63 Cash Accounts Receivable Inventory Click to open: O 12.59 Net Sales Less: Cost of Goods Sold Less: Depriciation Earnings before Interest and Taxes O 10.12 Less: Interest Paid Taxable income Less: Taxes Net Income Precision Tools 2012 Income Statement ($ in Millions) What is the times interest earned ratio for 2012? 2011 2060 3411 18776 24247 14160 38407 LE 36408 28225 1760 6423 510 5913 2070 3843 Precision Tools 2011 and 2012 Balance Sheets ($ in Millions) 2012 1003 Accounts Payable 4218 Long Term Debt 21908 Common Stock 27129 Retained Earnings 14080 41209 Total Liabilities and Equity 2011 7250 9800 15000 6357 38407 2012 8384 11500 17500 3825 41209 97
- Net Sales Cost of goods sold Average accounts receivable for the year Accounts receivable at year-end Average inventory for the year Inventory at year-end $1,095,000 657,000 44,250 18,000 226,000 158,400 Required: a. Calculate the inventory turnover for 2019.The following information relates to SE10-5 through SE10-7: (in millions) Net sales... Cost of goods sold SE10-7. Gross profit. Selling and administrative expenses Income from operations Interest expense.. EVANS & SONS, INC. Income Statement For Years Ended December 31, 2019 and 2018 Income before income taxes Income tax expense. Net income (in millions) Assets Current assets Cash and cash equivalents Accounts receivable Inventory.. Other current assets. Total current assets Property, plant, & equipment (net) Other assets. Total Assets Liabilities and Stockholders' Equity Current liabilities. Long-term liabilities. Total liabilities.. EVANS & SONS, INC. Balance Sheet December 31, 2019 and 2018 Stockholders' equity - common. Total Liabilities and Stockholders' Equity.. 2019 9,800 (5,500) 4,300 (2,800) 1,500 (300) $ 1,200 2019 100 900 500 400 2018 1,900 2,600 5,700 $10,200 9,300 (5,200) 4,100 (2,700) (220) (200) $980 $950 1,400 $ (250) 1,150 2018 300 800 650 250 2,000 2,500 5,900 $10,400…Comparative income statements and balance sheets for F&N are shown below ($ millions): Year 2 Year 1 Income Statement $19,889 6,204 Net sales. $20,092 6,044 Cost of goods Gross profit. Selling, general, and administrative expense Depreciation and amortization expense Interest expense (revenue) 14,048 7,893 803 (308) 13,685 9,221 773 292 3,399 1,222 Income before tax 5,660 1,691 Income tax expense. Net income $ 3,969 $ 2,177 Outstanding shares 3,491 3,481
- Presented below is the condensed financial statements of Williams Enterprise Ltd. forthe year ended December 31, 2019.Consolidated Statement of EarningsFor the years ended December 31, 2019 and December 31, 2018 2019 2018($ millions except where otherwise indicated)Sales $ 30,997 $ 30,735Cost of Merchandise Inventories Sold (note 9) 23,393 23,539Gross Profit 7,604 7,196Operating ExpensesSelling and administrative expenses 5,680 5,402Depreciation and amortization 655 5896,335 5,991Operating Income 1,269 1,205Interest expense and other financing charges (note 4) 273 269Earnings Before Income Taxes and Minority Interest 996 936Income Taxes (note 5) 297 269Net Earnings Before Minority Interest 699 667Minority Interest 18 11Net Earnings $ 681 $ 656Net Earnings Per Common Share ($) (note 6)Basic $ 2.45 $ 2.39Diluted $ 2.44 $ 2.38 Consolidated Statement of Financial PositionAs at December 31, 2019 and December 31, 2018($ millions) 2019 2018AssetsCurrent AssetsCash and cash equivalents (note…The data shown below were obtained from the financial records of the BST Corporation for the year ended December 31, 2020. Sound Break CorporationIncome and Retained Earnings StatementFor the year Ended December 31, 2020Net Sales P1,000,000Cost of Goods Sold:Inventory, Dec. 31, 2019 P250,000Purchases 720,000Total Goods Available P970,000Inventory 220,000 750,000Gross Margin on Sales P 250,000Selling and Administrative (including Depreciation of P20,000) 125,000Net Income before Tax P 125,000Provision for Income Tax 35,000Net Income for the Year P 90,000Retained Earnings, beginning 130,000Total P 220,000Dividends Paid 30,000Retained Earnings, December 31, 2020 P 190,000 Sound Break CorporationBALANCE SHEETDecember 31, 2019 and 2020 ASSETS 2019 2020Current Assets:Cash P 75,000 P 85,000Marketable Securities 25,000 25,000Trade Receivables, net 185,000 245,000Inventory, at cost 250,000 220,000Prepaid Expenses 15,000 10,000Total Current Assets P550,000 P585,000Property and Other…The data shown below were obtained from the financial records of the BST Corporation for the year ended December 31, 2020. Sound Break CorporationIncome and Retained Earnings StatementFor the year Ended December 31, 2020Net Sales P1,000,000Cost of Goods Sold:Inventory, Dec. 31, 2019 P250,000Purchases 720,000Total Goods Available P970,000Inventory 220,000 750,000Gross Margin on Sales P 250,000Selling and Administrative (including Depreciation of P20,000) 125,000Net Income before Tax P 125,000Provision for Income Tax 35,000Net Income for the Year P 90,000Retained Earnings, beginning 130,000Total P 220,000Dividends Paid 30,000Retained Earnings, December 31, 2020 P 190,000 Sound Break CorporationBALANCE SHEETDecember 31, 2019 and 2020 ASSETS 2019 2020Current Assets:Cash P 75,000 P 85,000Marketable Securities 25,000 25,000Trade Receivables, net 185,000 245,000Inventory, at cost 250,000 220,000Prepaid Expenses 15,000 10,000Total Current Assets P550,000 P585,000Property and Other…