Please complete the following 5 exercises below in either Excel or a word document (but must be single document).
You must show your work where appropriate (leaving the calculations within Excel cells is acceptable).
Save the document, and submit it in the appropriate week using the Assignment Submission button. 1. Critical Thinking Question: Answer the following questions: Why are noncash transactions, such as the exchange of common stock for a building for example, included on a statement of cash flows? How are these noncash transactions disclosed?
This reveals a non cash investing and financial activity that needs to be recorded, mainly because these transactions do not trigger a direct inflow or outflow of cash, but they are nonetheless highly significant investing and financing events. They are disclosed in the reporting noncash investing and financing activities. 2. Classification of activities Classify each of the following transactions as arising from an operating (O), investing (I), financing (F), or noncash investing/financing (N) activity. a. ___I_____ Received $80,000 from the sale of land.
b. __O______ Received $3,200 from cash sales. c. ___F_____ Paid a $5,000 dividend. d. ____O____ Purchased $8,800 of merchandise for cash. e. ____I____ Received $100,000 from the issuance of common stock. f. __F______ Paid $1,200 of interest on a note payable. g. __I______ Acquired a new laser printer by paying $650. h. ____N____ Acquired a $400,000 building by signing a $400,000 mortgage note. 3. Overview of direct and indirect methods Evaluate the comments that follow as being True or False. If the comment is false, briefly explain why. a.
The Business plan on Financial Manager Cash Financing Company
No 1 What is a Manager A number of different terms are used for "manager", including "director", "administrator" and "president." The term "manager" is used more frequently in profit-making organizations, while the others are used more widely in government and non - profit organizations such as universities, hospitals and social work agencies. What, then, is a manager When used collectively the ...
Both the direct and indirect methods will produce the same cash flow from operating activities. True statement; the indirect approach is an alternative method for preparing the statement of cash flows for the direct method. b. Depreciation expense is added back to net income when the indirect method is used. True statement; Because it is a non-cash expense, depreciable item is shown as an investing activity at the time the asset is acquired. c. One of the advantages of using the direct method rather than the indirect method is that larger cash flows from financing activities will be reported.
False statement; the larger cash flows are in the operating activities. d. The cash paid to suppliers is normally disclosed on the statement of cash flows when the indirect method of statement preparation is employed. True statement; the indirect approach begins with the company’s income and provides a listing of various adjustments that are needed to convert the results to a measure of operating cash flows. e. The dollar change in the Merchandise Inventory account appears on the statement of cash flows only when the direct method of statement preparation is used.
False statement; it also appears in the operating activities in the cash flow statement, it is subtracted because it corresponds to purchases of inventory in excess of cost of goods sold. 4. Equipment transaction and cash flow reporting Dec. 31, 20X4 Dec. 31, 20X3 Property, Plant & Equipment: Land $94,000 $94,000 Equipment 652,000 527,000 Less: Accumulated depreciation -316,000 -341,000 New equipment purchased during 20×4 totaled $280,000. The 20×4 income statement disclosed equipment depreciation expense of $41,000 and a $9,000 loss on the sale of equipment.
The Essay on The Accrual Basis Of Accounting Is Far Superior To The Cash Basis Of Accounting
The Accrual basis of accounting is far superior to the Cash basis of accounting. Discuss. The difference between accrual and cash basis of accounting is cash basis accounting recognizes revenues and expenses depends upon on timing. Cash basis accounting is simple, recognizes revenues when cash is received and recognizes expenses when cash is paid out only. It does not record accounts payable or ...
a. Determine the cost and accumulated depreciation of the equipment sold during 20X4. Equipment: The Beginning Balance is $527,000 New equipment will add $280,000 The cost of the equipment sold is $807,000 End Balance 20X4 $652,000 The Difference is $155,000 And the accumulated depreciation of the equipment sold: The Beginning Balance is 341,000 Add Depreciation expense 41,000 Subtotal: 382,000 End Balance for 20X4: 316,000 Subtotal Difference: 66,000 (the accumulated depreciation of the equipment sold) b. Determine the selling price of the equipment sold.
$155,000 – $66,000 = $89,000 $89,000 – ($9,000 loss) Investing activity as a positive of $80,000 cash flow c. Show how the sale of equipment would appear on a statement of cash flows prepared by using the indirect method. Cash flows investing activities Purchase on equipment 80,000 5. Cash flow information: Direct and indirect methods The comparative year-end balance sheets of Sign Graphics, Inc. , revealed the following activity in the company’s current accounts: 20X5 20X4 Increase / Decrease) Current assets Cash $55,400 $35,200 $20,200
Accounts receivable (net) 83,800 88,000 -4,200 Inventory 243,400 233,800 9,600 Prepaid expenses 25,400 24,200 1,200 Current liabilities Accounts payable $123,600 $140,600 ($17,000) Taxes payable 43,600 49,200 -5,600 Interest payable 9,000 6,400 2,600 Accrued liabilities 38,800 60,400 -21,600 Note payable 44,000 — 44,000 The accounts payable were for the purchase of merchandise. Prepaid expenses and accrued liabilities relate to the firm’s selling and administrative expenses. The company’s condensed income statement follows. SIGN GRAPHICS INC.
Income Statement for the Year Ended December 31, 20×5 Sales $713,800 Less: Cost of goods sold 323,000 Gross profit $390,800 Less: Selling & administrative expenses $186,000 Depreciation expense 17,000 Interest expense 27,000 230,000 Add: gain on sale of land $160,800 21,800 Income before taxes $182,600 Income taxes 36,800 Net income $145,800 Other data: 1. Long-term investments were purchased for cash at a cost of $74,600. 2. Cash proceeds from the sale of land totaled $76,200. 3. Store equipment of $44,000 was purchased by signing a short-term note payable.
The Term Paper on Financial Statement And Cash Flow Analysis
... or retain payout retain Statement of Cash Flows Cash Flow from Operations: Net income (I/S) + ... Dividends/Retained Earnings Sales (-) Cost of Goods Sold (-) Operating Expenses (-) Depreciation EBIT (-) Interest EBT (-) ... (net operating working capital + net plant and equipment) * WACC = (amount spent on B/S) * ... Liabilities and Equity Accounts payable Notes payable Accruals Total current liabilities ...
Also, a $150,000 telecommunications system was acquired by issuing 3,000 shares of preferred stock. 4. A long-term note of $49,400 was repaid. 5. Twenty thousand shares of common stock were issued at $5. 19 per share. 6. The company paid cash dividends amounting to $128,600. Instructions: a. Prepare the operating activities section of the company’s statement of cash flows, assuming use of: 1. The direct method. 2. The indirect method. b. Prepare the investing and financing activities sections of the statement of cash flows.
