Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 3, Problem 21PC
Interpreting the Statement of Cash Flows. Montgomery Ward
operates a retail department store chain. It filed for bankruptcy during the first quarter of Year 12.
Exhibit 3.24 presents a statement of cash flows for Montgomery Ward for Year 7 to Year 11.
The firm acquired Lechmere, a discount retailer of sporting goods and electronic products, during Year 9. It acquired Amoco Enterprises, an automobile club, during Year 11. During Year 10, it issued a new series of
REQUIRED
Discuss the relations between net income and cash flow from operations and among cash flows from operating, investing, and financing activities for the firm over the five-year period. Identify signals of Montgomery Ward's difficulties that might have led to its filing for bankruptcy.
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Dristell Incorporated had the following activities during the year (all transactions are for cash unless stated otherwise):
a. A building with a book value of $420,000 was sold for $520,000.
b. Additional common stock was issued for $180,000.
c. Dristell purchased its own common stock as treasury stock at a cost of $85,000.
d. Land was acquired by issuing a 6%, 10-year, $770,000 note payable to the seller.
e. A dividend of $60,000 was paid to shareholders.
f. An investment in Fleet Corporation's common stock was made for $140,000.
g. New equipment was purchased for $75,000.
h. A $100,000 note payable issued three years ago was paid in full.
i. A loan for $120,000 was made to one of Dristell's suppliers. The supplier plans to repay Dristell this amount plus 10% interest within
18 months.
Required:
Calculate net cash flows from investing activities. (Cash outflows should be indicated with a minus sign.)
DRISTELL INCORPORATED
Statement of Cash Flows (partial)
For the Year Ended December…
Dristell Incorporated had the following activities during the year (all transactions are for cash unless stated otherwise);
a. A building with a book value of $400,000 was sold for $500,000.
b. Additional common stock was issued for $160,000.
c. Dristell purchased its own common stock as treasury stock at a cost of $75,000.
d. Land was acquired by issuing a 6%, 10-year, $750,000 note payable to the seller.
e. A dividend of $40,000 was paid to shareholders.
f. An investment in Fleet Corporation's common stock was made for $120,000.
g. New equipment was purchased for $65,000.
h. A $90,000 note payable issued three years ago was paid in full.
1. A loan for $100,000 was made to one of Dristell's suppliers. The supplier plans to repay Dristell this amount plus 10% interest within
18 months.
Required:
Calculate net cash flows from investing activities. (Cash outflows should be indicated with a minus sign.)
Dristell Incorporated had the following activities during the year (all transactions are for cash unless stated otherwise):
a. A building with a book value of $419,000 was sold for $519,000.
b. Additional common stock was issued for $179,000.
c. Dristell purchased its own common stock as treasury stock at a cost of $84,500.
d. Land was acquired by issuing a 6%, 10-year, $769,000 note payable to the seller.
e. A dividend of $59,000 was paid to shareholders.
f. An investment in Fleet Corporation's common stock was made for $139,000.
g. New equipment was purchased for $74,500.
h. A $99,500 note payable issued three years ago was paid in full.
i. A loan for $119,000 was made to one of Dristell's suppliers. The supplier plans to repay Dristell this amount plus 10% interest
within 18 months.
Required:
Calculate net cash flows from financing activities. (Cash outflows should be indicated with a minus sign.)
DRISTELL INCORPORATED
Statement of Cash Flows (partial)
For the Year Ended December…
Chapter 3 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
Ch. 3 - Need for a Statement of Cash Flows. The accrual...Ch. 3 - Articulation of the Statement of Cash Flows with...Ch. 3 - Classification of Interest Expense. Under U.S....Ch. 3 - Prob. 4QECh. 3 - Classification of Changes in Short-Term Financing....Ch. 3 - Classification of Cash Flows Related to...Ch. 3 - Treatment of Non-Cash Exchanges. The acquisition...Ch. 3 - Computing Cash Collections from Customers....Ch. 3 - Computing Cash Payments to Suppliers. Lowes...Ch. 3 - Computing Cash Payments for Income Taxes. Visa...
Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting the Relation between Net Income and...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting Relations among Cash Flows from...Ch. 3 - Interpreting the Statement of Cash Flows. The...Ch. 3 - Interpreting the Statement of Cash Flows. Texas...Ch. 3 - Interpreting the Statement of Cash Flows. Tesla...Ch. 3 - Interpreting the Statement of Cash Flows. Gap Inc....Ch. 3 - Prob. 19PCCh. 3 - Prob. 20PCCh. 3 - Interpreting the Statement of Cash Flows....Ch. 3 - Extracting Performance Trends from the Statement...Ch. 3 - Interpreting a Direct Method Statement of Cash...Ch. 3 - Prob. 24PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 26PCCh. 3 - Preparing a Statement of Cash Flows from Balance...Ch. 3 - Prob. 1AICCh. 3 - Prob. 1BICCh. 3 - Prob. 1CICCh. 3 - Prob. 1DICCh. 3 - Prob. 1EICCh. 3 - Prob. 1FICCh. 3 - Prob. 1GICCh. 3 - Prob. 1HICCh. 3 - Prob. 2AICCh. 3 - Prob. 2BICCh. 3 - Prob. 2CICCh. 3 - Prob. 2DICCh. 3 - Prob. 2EICCh. 3 - Prob. 2FICCh. 3 - Prob. 3IC
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- Please help me answer questions 1-5 on the screenshot. In addition can you please help me find the total asset turn over that is not listed? Below are the financial statements. Thank you Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the year. A total of 500,000 shares of common stock were outstanding. The interest rate on the bonds, which were sold at their face value, was 10%. The income tax rate was 40% and the dividend per share of common stock was $0.40 this year. The market value of the company’s common stock at the end of the year was $29. All of the company’s sales are on account. Weller CorporationComparative Balance Sheet(dollars in thousands) This Year Last Year Assets Current assets: Cash $ 1,190 $ 1,280 Accounts receivable, net 10,300 7,100 Inventory 13,400…arrow_forwardTrident Corporation had the following cash flows in the current year. Which of the following will be categorized under the financing activities section of the statement of cash flows? O Purchase of $125,000 worth of five-year bonds issued by Towson Utilities O Rent on a warehouse amounting to $1.1 million O Lease income received on a piece of land O Preferred dividends of $330,000 paid to shareholdersarrow_forwardTexas, Inc., sold common stock for $560,000 and preferred stock for $36,000 during the current year. In addition, the company purchased treasury stock for $35,000 and paid dividends on common and preferred stock for $24,000. Determine the amount of cash provided by or used for financing activities during the year.arrow_forward
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