Problem 5+ Use the following information to prepare the Statement of Cash FlowsLuck CorporationForthe Year Ended Dece mber 31, 2020$ 13,640,000$ 1,300,000Net IncomeDeprecalton ExpenseAmortization of Patent150,000Sale of land$1,000,000$ 1,200,000GalnSale of bulding$ 200,000Los100,000Proceeds from Issuance of Common Stock$ 2,000,000Purchase of Equlpment350,000Payment of Cash DividendSale of Equipment400,000$ 350,000Loss500,000Select Balance Sheet Information:12/31/20$ 31,320,0001/1/20Cash$ 14, 250,000$ 5,900,000$ 6,880,000$ 4,650,000Accounts Re ce Ivable5,500,000Inventory7,350,000Accounts Payable5,100,000

Cash flow statement: It is a statement which reports the cash inflows and outflows of a business…

Answered: Problem 5--Use the following…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter6: Statement Of Cash Flows

Section: Chapter Questions

Problem 30E

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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.
Statement of cash flowsdirect method applied to PR 14-1B The comparative balance sheet of Merrick Equipment Co. for Dec. 31, 2016 and 2015, is: Dec. 31,2016 Dec. 31.201S Assets Cash 70,720 47,940 Accounts receivable (net) 207,230 188,190 Inventories 298,520 289,850 Investments. 0 102,000 Land 295,800 0 Equipment 438,600 358,020 Accumulated depreciationequipment (99,110) (84,320) Total assets 1,21,760 901,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) 205,700 194,140 Accrued expenses payable (operating expenses! 30,600 26,860 Dividends payable 25,500 20,400 Common stock. Si par. 202,000 102,000 Paid in capital: Excess of issue price over parcommon stock 354,000 204,000 Retained earnings 393,960 354,280 Total liabilities and stockholders equity 1,211,760 901,680 The income statement for the year ended December 31, 2016, is as follows: Sales- 2,023,898 Cost of merchandise sold 1,245,476 Gross profit 778,422 Operating expenses: Depreciation expense 14,790 Other operating expenses 517,299 Total operating expenses 532,089 Operating income 246,333 Other expenses: Loss on sale of investments (10,200) Income before income tax 236,133 Income tax expense- 94,453 Net income- 141,680 Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for 91,800 cash. d. The common stock was issued for cash. e. There was a 102,000 debit to Retained Laming for cash dividends declared. Instructions Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.
Statement of cash flows direct method applied to PR 131A The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2 is as follows: Dec. 31, 20Y3 Dec. 31, 20Y2 Assets Cash 155,000 150,000 Accounts receivable (net) 450,000 400,000 Inventories 770,000 750,000 Investments 0 100,000 Land 500,000 0 Equipment 1,400,000 1,200,000 Accumulated depreciationequipment (600,000) (500,000) Total assets Liabilities and Stockholders' Equity 2,675,000 2,100,000 Accounts payable (merchandise creditors) 340,000 300,000 Accrued expenses payable (operating expenses) 45,000 50,000 Dividends payable 30,000 25,000 Common stock, 4 par 700,000 600,000 Paid-in capital: Excess of issue price over parcommon stock 200,000 175,000 Retained earnings 1,360,000 950,000 Total liabilities and stockholders' equity 2,675,000 2,100,000 The income statement for the year ended December 31, 20Y3, is as follows: Sales 3,000,000 Cost of goods sold 1,400,000 Gross profit 1,600,000 Operating expenses: Depreciation expense 100,000 Other operating expenses. 950,000 Total operating expenses 1,050,000 Operating income 550,000 Gain on sale of investments 75,000 Income before income tax 625,000 Income tax expense 125,00 Net income 500,000 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: A. The investments were sold for 175,000 cash. B. Equipment and land were acquired for cash. C. There were no disposals of equipment during the year. D. The common stock was issued for cash. E. There was a 90,000 debit to Retained Earnings for cash dividends declared. Instructions Prepare a .statement of cash flows, using the direct method of presenting cash flows from operating activities.

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