3 Bad Brad's BBQ had cash flows for the year as follows ($ in millions): CASH RECEIVED FROM: Customers Interest on investments Sale of land Sale of common stock Issuance of debt securities CASH PAID FOR: Interest on debt Income tax Debt principal reduction Purchase of equipment Purchase of inventory Dividends on common stock Operating expenses $2,500 270 100 520 2,700 $ 340 150 1,400 3,700 1,000 230 700 Bad Brad's would report net cash inflows (outflows) from operating activities in the amount of:

3 Bad Brad's BBQ had cash flows for the year as follows ($ in millions): CASH RECEIVED FROM: Customers Interest on investments Sale of land Sale of common stock Issuance of debt securities CASH PAID FOR: Interest on debt Income tax Debt principal reduction Purchase of equipment Purchase of inventory Dividends on common stock Operating expenses $2,500 270 100 520 2,700 $ 340 150 1,400 3,700 1,000 230 700 Bad Brad's would report net cash inflows (outflows) from operating activities in the amount of:

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 55PSA

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FREE CASH FLOW Arlington Corporation's financial statements (dollars and shares are in millions) are provided here. Balance Sheets as of December 31 2018 2017 Assets Cash and equivalents 15,000 14,000 Accounts receivable 35,000 30,000 Inventories 33,320 27,000 Total current assets 83,320 71,000 Net plant and equipment 48,000 46,000 Total assets 131,320 117,000 Liabilities and Equity Accounts payable 10,100 9,000 Accruals 8,000 6,000 Notes payable 7,000 5,050 Total current liabilities 25,100 20,050 Long term bonds 20,000 20,000 Total liabilities 45,100 40,050 Common stock(4,000 shares) 40,000 40,000 Retained earnings 46,220 36,950 Common equity 86,220 76,950 Total liabilities and equity 131,320 117,000 Income Statement for Year Ending December 31, 2018 Sales 210,000 Operating cost excluding depreciation and amortization 160,00 EBITDA 50,000 Depreciation and amortization 6000 EBIT 44,000 interest 5,350 EBT 5,38,650 Taxes (40%) 15,460 Net income 23,190 Dividends paid 13,920 a. What was net operating working capital for 2017 and 2018? Assume that all cash is excess cash; i.e., this cash is not needed for operating purposes. b. What was .Arlingtons 2018 free cash flow? c. Construct Arlingtons 2018 statement of stockholders equity. d. What was Arlingtons 2018 EVA? Assume that its after tax cost of capital is 10%. e. What was Arlingtons MVA at year-end 2018? Assume that its stock price at December 31, 2018? Was 25.
Tidwell Company experienced the following during 20X1: a. Sold preferred stock for 480,000. b. Declared dividends of 150,000 payable on March 1, 20X2. c. Borrowed 575,000 from a bank on a 2-year note. d. Purchased 80,000 of its own common stock to hold as treasury stock. e. Repaid 5-year bonds issued for 400,000 that mature and are due in December. Required: Prepare the net cash from financing activities section of the statement of cash flows.
Statement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.
Chasse Building Supply Inc. reported net cash provided by operating activities of $243,000, capital expenditures of $112,900, cash dividends of $35,800, and average maturities of long-term debt over the next 5 years of $122,300. What is Chasses free cash flow and cash flow adequacy ratio? a. $94,300 and 0.77, respectively c. $130,100 and 1.06, respectively b. $94,300 and 0.82, respectively d. $165,900 and 1.36, respectively
Statement of Cash Flows The following are several items involving Tejera Companys cash flow activities: a. Net income, 60,400 b. Receipt from issuance of common stock, 32,000 c. Payment for purchase of equipment, 41,500 d. Payment for purchase of land, 19,600 e. Depreciation expense, 20,500 f. Patent amortization expense, 1,200 g. Payment of dividends, 21,000 h. Decrease in salaries payable, 2,600 i. Increase in accounts receivable, 10,300 j. Beginning cash balance, 30,700 Required: Prepare Tejeras statement of cash flows using the direct method.
MASTERY PROBLEM Financial statements for Peachfield Corporation as well as additional information relevant to cash flows during the period follow. Additional information: 1. Office equipment was sold during the year for 75,000. 2. Depreciation expense for the year was 62,400 as follows: 3. No other equipment was sold during the year. The following purchases were made for cash. 4. Declared and paid cash dividends of 20,000. 5. Issued 11,200 shares of 10 par common stock for 118,000. 6. Issued a note payable for 10,700. 7. Additional store equipment was acquired by issuing a long-term note payable for 20,000. REQUIRED 1. Prepare a statement of cash flows explaining the change in cash and cash equivalents. 2. Reconcile cash and cash equivalents at the bottom of the statement of cash flows.