Match each item on the left to the appropriate cash flow classification on the right. (You may use each classification r than once -- or not at all.) A company purchases a warehouse for $350,000 cash. A. Cash flow from operating activities. B. Cash flows from financing activities. C. No cash flow effect. ✓ A company uses $100,000 to pay dividends on common stock. D. Cash flow from investing activities. ✓ A company acquires equipment by signing a note payable for the purchase amount. A company collects $50,000 from a customer to provide services over the next year. ✓ A company pays interest of $50,000 on outstanding bonds payable

Match each item on the left to the appropriate cash flow classification on the right. (You may use each classification r than once -- or not at all.) A company purchases a warehouse for $350,000 cash. A. Cash flow from operating activities. B. Cash flows from financing activities. C. No cash flow effect. ✓ A company uses $100,000 to pay dividends on common stock. D. Cash flow from investing activities. ✓ A company acquires equipment by signing a note payable for the purchase amount. A company collects $50,000 from a customer to provide services over the next year. ✓ A company pays interest of $50,000 on outstanding bonds payable

Corporate Financial Accounting

14th Edition

ISBN:9781305653535

Author:Carl Warren, James M. Reeve, Jonathan Duchac

Publisher:Carl Warren, James M. Reeve, Jonathan Duchac

Chapter13: Statement Of Cash Flows

Section: Chapter Questions

Problem 13.2EX: Effect of transactions on cash flows State the effect (cash receipt or cash payment and amount) of...

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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.
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