Question 1

A company reported average total assets of $501,000 in Year 1 and $611,000 in Year 2. Its net operating cash flow in Year 1 was $41,500 and $55,250 in Year 2. Calculate its cash flow on total assets ratio for both years. Comment on the results.

Accepted Answer

The answer of A company reported average total assets of...

Question 2

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.
 \(\begin{array}{c}
\begin{array}{|l}
\hline \text {(a)}\
\hline\
\hline\
\hline\
\hline\
\hline\
\hline \text {(b)}\
\hline \
\hline \
\
\hline \
\hline \
\hline \
\hline \
\hline \
\hline \
\hline \text {(c)}\
\hline \
\hline \
\hline \
\hline \
\hline
\end{array}
\begin{array}{|l|}
 \hline \text { Accounts receivable balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of year}\
 \hline \text { Sales revenue (all on credit)}\
 \hline \text { Cash received from customers}\
 \hline \
 \hline \text { Accounts payable balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of}\
\text { year.}\
 \hline \text { Merchandise inventory balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of year}\
 \hline \text { Cost of goods sold}\
 \hline \text { Cash paid for merchandise inventory}\
 \hline \
 \hline \text { Interest payable balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of year}\
 \hline \text { Interest expense}\
 \hline \text { Cash paid for interest}\
 \hline  
\end{array}
\begin{array}{l|}
\hline\
\hline \$ 60,000  \
\hline 57,000 \
\hline 375,000 \
\hline \$\underline{\quad\quad}  \
\hline\ 
\hline\
\hline \$ 42,000 \
\hline \
45,000 \
\hline\
\hline 50,000 \
\hline 47,500 \
\hline 250,000 \
\hline \$ \underline{\quad\quad}  \
\hline \
\hline \
\hline 7,500 \
\hline 9,200 \
\hline 35,000 \
\hline\$\underline{\quad\quad} \
\hline 
\end{array}
\end{array}\)

Accepted Answer

The answer of For each of the following separate cases,...

Question 3

Tate Company's 20X2 income statement and changes in selected balance sheet accounts are given below. Calculate the company's net cash provided or used by operating activities using the direct method.
 $\begin{array}{c}
 \text {Tate Company}\
 \text {Income Statement}\
 \text {For Year Ended December 31, \( 20 \mathrm{X} 2 $}\
\begin{array}{|ll|c|c|}
 \hline \text {Sales  } & \text {  }  & \text {  }&\$248,000\
\hline \text {Cost of goods sold  } & \text {  } & \text {  }&\underline{116,000}\
\hline \text { Gross profit } & \text {  } & \text {  }&\$132,000\
 \hline\text {  Operating expenses:} & \text {  } & \text {  }\
\hline \text { Wages and salaries expense } & \text {  } & \$44,000\
\hline \text {Rent expense  } & \text {  } & 16,000\
 \hline \text { Depreciation expense } & \text {  }  & 30,000\
\hline \text { Amortization expense } & \text {  } & 12,000\
\hline \text { Other expenses } & \text {  } &\underline{18,000  }&\underline{120,000}\
 \hline\text {Income from operations  } & \text {  } & \text {  }&\$12,000\
\hline \text {  Gain on sale of equipment} & \text {  } & \text {  }&\underline{26,000}\
\hline \text {  Income before taxes} & \text {  } & \text {  }&\$38,000\
\hline &&&\underline{\quad\quad}\
 \text {Income tax expense  } & \text {  } & \text {  }&\underline{13,300}\
\hline \text { Net Income } & \text {  } & \text {  }&\underline{\$24,700}\
\hline \text {  } & \text {  } & \text {  }\
\hline 
\end{array}
\end{array}\)
 The company also experienced the following during 20X2:
 $\begin{array} { | l | l | } 
\hline \text { Increase in accounts receivable } & \$ 4,000 \
\hline \text { Increase in accounts payable (all accounts } & \
\hline \text { payable transactions are for inventory) } & 16,000 \
\hline \text { Increase in income taxes payable } & 300 \
\hline \text { Decrease in prepaid expenses } & 10,000 \
\hline \text { Decrease in merchandise inventory } & 14,000 \
\hline \text { Decrease in long-term notes payable } & 0,000 \
\hline
\end{array}$

Accepted Answer

The answer of Tate Company's 20X2 income statement and changes...

Question 4

For each of the following separate cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.
 \(\begin{array}{c}
\begin{array}{|l}
\hline \text {(a)}\
\hline\
\hline\
\hline\
\hline\ 
\hline\
\hline \text {(b)}\
\hline \
\hline \

\hline \
\hline \
\hline \
\hline \
\hline \
\hline \
\hline \text {(c)}\
\hline \
\hline \
\hline \
\hline \
\hline
\end{array}
\begin{array}{|l|}
 \hline \text { Accounts receivable balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of year}\
 \hline \text { Sales revenue (all on credit)}\
 \hline \text { Cash received from customers}\
 \hline \
 \hline \text { Accounts payable balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of year.}\
 \hline \text { Merchandise inventory balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of year}\
 \hline \text { Cost of goods sold}\
 \hline \text { Cash paid for merchandise inventory}\
 \hline \
 \hline \text { Interest payable balances:}\
 \hline \text { Beginning of year}\
 \hline \text { End of year}\
 \hline \text { Interest expense}\
 \hline \text { Cash paid for interest}\
 \hline  
\end{array}
\begin{array}{l|}
\hline\
\hline \$ 60,000  \
\hline 63,000 \
\hline 395,000 \
\hline \$\underline{\quad\quad}  \
\hline\ 
\hline\
\hline \$ 42,000 \
\hline 31,000 \
\hline\
\hline 50,000 \
\hline 52,500 \
\hline 250,000 \
\hline \$ \underline{\quad\quad}  \
\hline \
\hline \
\hline 7,500 \
\hline 8,200 \
\hline 31,000 \
\hline\$\underline{\quad\quad} \
\hline 
\end{array}
\end{array}\)

Accepted Answer

The answer of For each of the following separate cases,...

Question 5

Use the information provided to calculate the cash paid for insurance for the period
 $\begin{array}{|ll|cc|}
 \hline \text {  } & \text {  }  & \text {  \$}\
\hline \text {  } & \text {Prepaid insurance, beginning-year..............  } & \text { 7,000 }\
\hline \text {  } & \text { Insurance expense..................................... } & \text { 16,800 }\
 \hline\text {  } & \text {Prepaid insurance, year-end.......................  } & \text { 3,400 }\
\hline \text {  } & \text { Cash paid for insurance............................ } & \text {  }\
\hline \text {  } & \text {  } & \text {  }\
\hline  
\end{array}$

Accepted Answer

The answer of Use the information provided to calculate the...

Question 6

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Accepted Answer

The answer of A corporation reported average total assets in...

Question 7

Use the information provided to calculate the missing cash paid for merchandise for the period.
 $\begin{array}{|l|lcc|}
 \hline \text { Accounts payable, beginning-year.\ldots \ldots \ldots \ldots \ldots \ldots \ldots } & \$60,000\
\hline \text { Cost of goods sold.\ldots \ldots \ldots \ldots \ldots \ldots \ldots } &244,000\
\hline \text { Merchandise inventory, beginning-year\ldots \ldots \ldots \ldots \ldots \ldots \ldots } & 35,000\
 \hline\text {Merchandise inventory, year-end\ldots \ldots \ldots \ldots \ldots \ldots \ldots  } &40,500\
\hline \text { Accounts payable, year-end\ldots \ldots \ldots \ldots \ldots \ldots \ldots } &64,800\
\hline \text { Cash paid for merchandise. \ldots \ldots \ldots \ldots \ldots \ldots \ldots} &\ 
\hline
\end{array}$

Accepted Answer

The answer of Use the information provided to calculate the...

Question 8

Use the following information about the calendar-year cash flows of Park Company to prepare a statement of cash flows (direct method) and a schedule of noncash investing and financing activities.
 $\begin{array} { | l | l | } 
\hline \text { Cash and cash equivalents, beginning-year balance } & \$ 18,000 \
\hline \text { Cash and cash equivalents, year-end balance } & 78,750 \
\hline \text { Cash payments for merchandise inventory } & 75,750 \
\hline \text { Cash paid for store equipment } & 15,750 \
\hline \text { Cash borrowed on three-month note payable } & 22,500 \
\hline \text { Cash dividends paid } & 12,000 \
\hline \text { Cash paid for salaries } & 39,000 \
\hline \text { Cash payments for other operating expenses } & 48,000 \
\hline \text { Building purchased and financed by long-term note payable } & 78,000 \
\hline \text { Cash received from customers } & 220,500 \
\hline \text { Cash interestreceived } & 8,250 \
\hline
\end{array}$

Accepted Answer

The answer of Use the following information about the calendar-year...

Question 9

Use the following calendar-year information to prepare Adam Company's statement of cash flows using the direct method.
 $\begin{array} { | l | r | } 
\hline \text { Cash paid to purchase machinery } & \$ 124,000 \
\hline \text { Cash paid for merchandise inventory } & 220,000 \
\hline \text { Cash paid for operating expenses } & 280,000 \
\hline \text { Cash paid for interest } & 4,000 \
\hline \text { Cash received for interest } & 10,000 \
\hline \text { Cash proceeds from sale of land } & 100,000 \
\hline \text { Cash balance at beginning of year } & 15,000 \
\hline\text { Cash balance at end of year }&77,000\
\hline \text { Cash borrowed on a short-term note } & 25,000 \
\hline \text { Cash dividends paid } & 24,000 \
\hline \text { Cash received from stock issuance } &57,000 \
\hline \text { Cash collections from customers } & 522,000 \
\hline
\end{array}$

Accepted Answer

The answer of Use the following calendar-year information to prepare...

Question 10

Based on the information in the following income statement and balance sheet for Monterey Corporation, determine the cash flows from operating activities using the direct method.
 $\begin{array} { c } 
\text { Monterey Corporation } \
\text { Income Statement }\
 { \text { For Year Ended December 31, 20X2 } } \ 
\begin{array}  { | l | l | l | } 
\hline \text { Sales } &  & \$504,000\
\hline \text { Cost of goods sold } & 327,600& \
\hline \text { Depreciation } & 42,000&  \
\hline \text { Other operating expenses } &\underline{125,500} &(495,100) \
\hline \text { Other gains (losses): } & &  \
\hline \text { Gain on sale of equipment } & & \underline{7,200}\
\hline \text { Income before taxes } & &16,100 \
\hline \text { Income tax expense } & &\underline{(4,800) }\
\hline \text { Net income } & & \underline{\$11,300}\
\hline &\
\hline
\end{array}
\end{array}$ \(\begin{array}{c}
\text {Monterey Corporation}\
\text {Balance Sheets}\
\text {At December 31}\ 
\begin{array}{|l|l|l|}
\hline& 20 \mathrm{X} 2 & 20 \mathrm{X} 1 \
\hline \text { Cash }  & \$ 64,650 & \$ 55,800 \ 
\hline  \text { Accounts receivable } & 21,000 & 29,000 \
\hline \text { Inventory } & 58,000 & 52,100 \
\hline \text { Equipment }& 440,000 & 222,000 \
\hline\text { Accumulated depreciation }  &\underline{ (106,000)} & \underline{(96,000)} \
\hline \text { Total assets } & \underline{\$ 277,650 }&\underline{ \$ 262,900 }\
\hline\
\hline \text { Liabilities: } & & \
\hline \text { Accounts payable } &  \$ 28,400 & \$ 23,700 \
\hline \text { Income taxes payable } &1,050 & 1,200 \
\hline \text { Total liabilities } & \$ 29,450 & \$ 24,900 \
\hline \text { Equity: } &  \
\hline \text { Common stock } &  \$ 106,000 & \$ 106,000 \
\hline \text { Paid-in Capital in Excess of Par.......... } & 18,000 & 18,000 \
\hline \text { Retained earnings } &\underline{124,000}&\underline{114,000} \
\hline \text { Total equity } & \underline{\$ 248,200 }&\underline{ \$ 238,000 }\
\hline \text { Total liabilities and equity } & \underline{\$ 277,650 }&\underline{ \$ 262,900} \
\hline
\end{array}
\end{array}\)

Accepted Answer

The answer of Based on the information in the following...

Question 11

Babson reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year. Babson's net cash flows from operations were $2,204 million. Calculate the cash flow on total assets ratio for Babson.

Accepted Answer

The answer of Babson reported assets of $13,362 million at...

Question 12

A company reported net income of $132,000, operating cash flows of $87,000, total cash flows of $112,000, and average total assets of $1,053,000. Calculate its cash flow on total assets ratio.

Accepted Answer

The answer of A company reported net income of $132,000,...

Question 13

A company reported net income of $318,000, operating cash flows of $218,000, total cash flows of $184,000, and average total assets of $898,000. Calculate its cash flow on total assets ratio.

Accepted Answer

The answer of A company reported net income of $318,000,...

Question 14

Keita Co. reported net income of $213.4 million, net cash provided by operating activities of $151.3 million, total cash flows of $187.7 million, and average total assets of 2,314.8 million at the end of the year. Calculate the cash flow on total assets ratio for Keita.

Accepted Answer

The answer of Keita Co. reported net income of $213.4...

Question 15

The following selected account balances are taken from a merchandising company's records:
 $\begin{array} { | l | r | r | r | } 
\hline & \text { Dec. 31 } & \text { Dec. 31, } & \text { For the } \
\hline & 20 \mathrm { X } 2 & 20 \mathrm { X } 1 & \text { Year } 20 \mathrm { X } 2 \
\hline \text { Merchandise inventory } & \$ 4,600 & \$ 21,200 & \
\hline \text { Accounts receivable } & 42,000 & 36,000 & \
\hline \text { Accounts payable } & 32,400 & 27,400 & \
\hline \text { Salaries payable } & 4,400 & 3,000 & \
\hline & & & \
\hline \text { Total assets } & 234,000 & 286,000 & \
\hline \text { Sales } & & & \$ 312,000 \
\hline \text { Cost of goods sold } & & & 165,600 \
\hline \text { Salaries expense } & & & 48,000 \
\hline
\end{array}$ (a) Calculate the cash payments made during 20X2 for merchandise. Assume all of the company's accounts payable balances result from merchandise purchases.
(b) Calculate the cash receipts from customer sales during 20X2.
(c) Calculate the cash payments for salaries during 20X2.

Accepted Answer

The answer of The following selected account balances are taken...

Question 16

Faster Freight Co. reported net cash provided by operating activities of $142.7 million and average total assets of 1,762.5 million at the end of the year. Calculate the cash flow on total assets ratio for Faster Freight.

Accepted Answer

The answer of Faster Freight Co. reported net cash provided...

Question 17

A company reported operating cash flows in Year 1 of $33,100 and $26,220 in Year 2. Its average total assets in Year 1 were $262,000 and $313,000 in Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Accepted Answer

The answer of A company reported operating cash flows in...

Question 18

For each of the following independent cases, use the information provided to calculate the missing cash inflow or cash outflow using the direct method.
 \(\begin{array}{|l|l|cc|}
 \hline \text { (a) } & \text { Interest payable, beginning-year }  &\$4,200\
\hline \text {  } & \text {Interest expense.  } &26,700\
\hline \text {  } & \text {Interest payable, year-end  } &3,000\
 \hline\text {  } & \text { Cash paid for interest } & \text {  }\
\hline \text {  } & \text {  } & \text {  }\
\hline \text { (b) } & \text {  Prepaid insurance, beginning-year.} & \$7,000\
 \hline \text {  } & \text { Insurance expense }  &16,800\
\hline \text {  } & \text {Prepaid insurance, year-end.  } &3,400\
\hline \text {  } & \text { Cash paid for insurance. } & \text {  }\
 \hline\text {  } & \text {  } & \text {  }\
\hline \text { (c) } & \text { Interest receivable, beginning-year } & \$800\
\hline \text {  } & \text { Interest revenue } &12,600\
 \hline \text {  } & \text {Interest receivable, year-end  }  & 1,200\
\hline \text {  } & \text { Cash received for interest. } & \text {  }\
\hline \text {  } & \text {  } & \text {  }\
 \hline\text { (d) } & \text { Accounts payable, beginning-year. } & \$60,000\
\hline \text {  } & \text { Cost of goods sold. } &244,000\
\hline \text {  } & \text {Merchandise inventory, beginning-year.  } & 35,000\
\hline \text {  } & \text {Merchandise inventory, year-end  } &40,500\
\hline \text {  } & \text { Accounts payable, year-end } & 64,800\
\hline \text {  } & \text { Cash paid for merchandise . } & \text {  }\
\hline
\end{array}\)

Accepted Answer

The answer of For each of the following independent cases,...

Question 19

Use the information provided below to calculate the cash paid for interest for the period.
 $\begin{array}{|l|l|cc|}
 \hline \text {\quad\quad\quad  } & \text {Interest payable, beginning-year.  }  & \text {\$4,200  }\
\hline \text {  } & \text {Interest expense.  } & \text {26,700 }\
\hline \text {  } & \text { Interest payable, year-end } & \text { 3,000}\
 \hline\text {  } & \text { Cash paid for interest } & \text {  }\
\hline 
\end{array}$

Accepted Answer

The answer of Use the information provided below to calculate...

Question 20

Use the information provided to calculate the missing cash received for interest for the period.
 $\begin{array}{|l|lcc|}
 \hline \text {Interest receivable, beginning-year\ldots \ldots \ldots \ldots \ldots \ldots \ldots  } & \$800 \
 \text { Interest revenue.\ldots \ldots \ldots \ldots \ldots \ldots \ldots } &12,600\
 \hline\text {  Interest receivable, year-end.\ldots \ldots \ldots \ldots \ldots \ldots \ldots} &1,200\
\hline \text { Cash received for interest.\ldots \ldots \ldots \ldots \ldots \ldots \ldots } &\
\hline\
\hline
\end{array}$

Accepted Answer

The answer of Use the information provided to calculate the...

Quiz 12: Reporting Cash Flows

A company reported average total assets of $501,000 in Year 1 and $611,000 in Year 2. Its net operating cash flow in Year 1 was $41,500 and $55,250 in Year 2. Calculate its cash flow on total assets ratio for both years. Comment on the results.

A corporation reported average total assets in Year 1 of $397,350 and $440,800 in Year 2. Its net operating cash flow for Year 1 was $35,667 and $35,790 for Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.

Babson reported assets of $13,362 million at January 1 and $13,369 million as of December 31 of the current year. Babson's net cash flows from operations were $2,204 million. Calculate the cash flow on total assets ratio for Babson.

A company reported net income of $132,000, operating cash flows of $87,000, total cash flows of $112,000, and average total assets of $1,053,000. Calculate its cash flow on total assets ratio.

A company reported net income of $318,000, operating cash flows of $218,000, total cash flows of $184,000, and average total assets of $898,000. Calculate its cash flow on total assets ratio.

Keita Co. reported net income of $213.4 million, net cash provided by operating activities of $151.3 million, total cash flows of $187.7 million, and average total assets of 2,314.8 million at the end of the year. Calculate the cash flow on total assets ratio for Keita.

Faster Freight Co. reported net cash provided by operating activities of $142.7 million and average total assets of 1,762.5 million at the end of the year. Calculate the cash flow on total assets ratio for Faster Freight.

A company reported operating cash flows in Year 1 of $33,100 and $26,220 in Year 2. Its average total assets in Year 1 were $262,000 and $313,000 in Year 2. Calculate the cash flow on total assets ratio for both years. Comment on the results.