Week 1 Homework

The company’s sales for the current period are $185,000. The current period’s entry to record warranty expense is:

i. Cable with the addition of a shield is called shielded twisted-pair (STP) cable. The addition of this shield reduces the potential for electromagnetic interference (EMI) as long as the shield is grounded.

Based on information given, we established the free cash flows from operations for Torrington, for the period 1999 to 2007. We made the assumption that net working capital was 7% of sales for Torrington, based on historic patterns. From this assumption, we found “Change in Net Working Capital” for the selected years. Next, we chose a value for “Capital Expenditures”, again based on historic patterns. From this we computed the “Free Cash Flows to the Firm”.

14. Weiland Co. shows the following information on its 2014 income statement: sales = $167,000; costs = $88,600; other expenses = $4,900; depreciation expense =

In 2011, their cash flows from investing were -$19,008, and -$3,633 in 2010. Most of their investing is due to additions to property and equipment.

Cash flows from operating activities and net income can be derived using different methods. Therefore these numbers are different. The cash flows from operating activities are created from the core business. There are also investing activities and financing activities. “Cash flows from operations are the best method of calculating a company’s financial health because cash flow is harder to manipulate than net income and because a company must create cash over a period of time” (Waymon).

Exhibit TN-4 CASH FLOW STATEMENTS (%) 2006 Operations Net Income Add/Minus : Depreciations Accounts Receivables Parts Inventory WIP Inventory FG Inventory Accounts Payable Total Investing Land, Plant and Equipment Other Assets Total Financing Long Term debt Total Change in Cash Profitability: 1,160,845,238 1,160,845,238 479,789,073 ,1594,740,016 1,594,740,016 646,808,200 267,974,210 267,974,210 -70,701,212 802,111,997 802,111,997

RAH Industries has the following financial statements for 2014 and 2015. RAH’s stock has no par value. The firm paid a dividend in 2015 of $500 million. Long-term debt of $150 million was retired in 2015. RAH also issued stock and long-term debt in 2015. There are 4 questions. Show your work in arriving at your answers. Assume RAH uses these statements for both financial reporting and tax purposes and that it sold no assets during 2015. Compute the cash flows for 2015 using (1) the financial statement of cash flows with notes payable as financing liability (i.e., included in the concept of Net Operating Working Capital) (2) the accounting statement of cash flows, also with notes payable as financing liability, as above. (3) Write a paragraph

The company use $12,000 to purchase Equipment and $8,000 to purchase Inventory. The outflow of resource is therefore ($12,000 + $8,000) $20,000 and the present cash level at ($25,000 - $20,000) $5,000.

A net profit was shown on the statement in 2004 of $8,119,000. This adjusted non-cash items accurately were important add-ons were a new provision for loss on discontinued operations, the loss from discontinued operations, the foreign exchange rate difference, and deferred taxes. The subtraction that was considerable was in the respect of benefit on stock options. This is an indication that the business is showing advancement. The analysis of the working capital is for this year cash flows were from the notes, deferred income, warranty costs, a control on payroll cost, and taking some services on credit. The cash outflows were from the receivables (higher credit sales), restricted cash, purchase of inventory, and other current assets. Meanwhile the non-cash adjustment created a positive figure along with positive cash inflows from the working capital adjustments,

4. Using the format of a cash flow statement (you can search for examples of the

7,875 8,269 Travel and Vehicle Costs 15,000 16,500 18,150 Rent and Utilities 17,500 18,375 19,294 Miscellaneous Costs 4,915 5,357 5,839 Payroll Taxes 36,450 37,544 41,057 Total Operating Costs $ 377,526 $391,667 $424,769 EBITDA $212,235 $251,172 $275,926 Federal Income Tax 70,038 78,862 87,359 State Income Tax 10,612 11,949 13,236 Interest Expense 13,107 12,197 11,202 Depreciation Expenses 5,893 5,893 5,893 Net Profit $112,586 148,165 164,129 Profit Margin 17.18% 20.74% 21.08% United Cakes of America’s Cash Flow Analysis Proforma Cash Flow Analysis-(Yearly) Year 1 2 3 Cash from Operations $152,225 $222,217 $289,262 Cash from Receivables $0 $0 $0 Operating Cash Inflow $152,225

The cash flow statement is very similar to an everyday checkbook. This represents money in and money out. This shows deposits and liabilities in streamline of investments made, accounts payables, and equities that transpired over the year. The year 2014 after had a more profitable year than 2013.

Since a cash flow statement classifies cash receipts and payments based on operations, investments, and financing activities, it's categorized into these three functional sections within the business. Therefore, the major parts of the cash flow statement are cash-related operations, investments, financing, and net increase or decrease in cash. While cash from operations is cash generated from a firm's daily operations, the investing cash is generated from assets' investments. On the other hand, financing cash is paid or received from the issued or borrowed funds whereas net increase or decrease in cash is from annual rise or reduction in cash. It's important to note that regardless of the slight differences in cash flow statements, they all present financial information in all the four categories ("Cash Flow Statement", n.d.).

A)Statement of cash flows: Shows how much cash comes in and out of the business,as it reports the cash generated and used during the time interval.specified in its heading. Cash from operating activities is compared to the company’s net income i.e. if it is consistently greater than the net income, then the company’s net income is said to be of high quality, whereas if it is lower than net income concerns