The Black Limo Company (BLC) purchased a limo on January 1 of Year 1. The limo cost $48,000. It had an expected useful life of 4 years and an $8,000 salvage value. Assume BLC uses straight-line depreciation. At the beginning of Year 3, the limo is sold for $30,000 cash. As a result of the asset disposal BLC will recognize a ______ activities.
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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.Exercise 1-50 Statement of Cash Flows OBJECTIVE o Walters Inc. began operations on January I. 2019. The following information relates to Walters cash flows during 2019. Required: 1. Calculate the cash provided/fused for each cash flow category. 2. CONCEPTUAL CONNECTION Comment on Walters creditworthiness.Financial statements Padget Home Services began its operations on January 1, 20Y7 (see Problem 2-3). After its second year of operations. the following amounts were taken from the accounting records of Padget Home Services, Inc., as of December 31, 20Y8. Instructions Prepare a statement of cash flows for the year ending December 31, 20Y8. (Hint: You should compare the asset and liability amounts of December 31. 20Y8, with those of December 31, 20Y7, to determine cash used in investing and financing activities. See Problem 2-3 for the December 31, 20Y7, balance sheet amounts.)
- Keisler Corporation reports: Cash provided by operating activities $240,000 Cash used by investing activities $110,000 Cash provided by financing activities $140,000 Beginning cash balance $70,000 What is Keisler's ending cash balance? a) $270,000 b) $340,000 c) $490,000 d) $560,000.Q1) Binay Shop earned net income of $57,000 after deducting depreciation of $5,000 and all other expenses. Current assets decreased by $4,000, and current liabilities increased by $8,000. How much was Binay Shop’s cash provided by operating activities (indirect method)?Cash Flow from Operating ActivitiesUsing the information for the Seville Corporation, calculate the cash flow from operating activities. Accounts payable increase $4,500 Accounts receivable increase 2,000 Accrued liabilities decrease 1,500 Amortization expense 6,000 Cash balance, January 1 22,000 Cash balance, December 31 15,000 Cash paid as dividends 29,000 Cash paid to purchase land 90,000 Cash paid to retire bonds payable at par 60,000 Cash received from issuance of common stock 35,000 Cash received from sale of equipment 17,000 Depreciation expense 29,000 Gain on sale of equipment 2,000 Inventory decrease 6,500 Net income 38,000 Prepaid expenses increase 1,000 Use a negative sign with answer to show cash outflow from (used by) operating activities. Cash flow from (or used by) operating activities: $Answer
- Revenue R100 000, Debtors (opening R50 000, closing R110 000), Calculate Cash Receipts from Customers. Select one: a. R60 000 b. R40 000 c. R110 000 d. R100 000Q3. From the information given, prepare a statement of cash flows. . Net income $40,000 Dividends paid 5,000 Increase in accounts receivable 10,000 Increase in accounts payable 7,000 Purchase of equipment 8,000 Depreciation expense 4,000 Issue of notes payable 20,000ABC DEF GHI JKL Operating cash flow $ 13,230,000 $ 13,625,000 $ 8,020,000 $ 12,588,000 Investing cash flow (2,629,000) (2,226,000) (5,359,000) (3,945,000) Financing cash flow (8,861,000) (13,477,000) (1,840,000) (8,584,000) Change in cash $ 1,740,000 $ (2,078,000) $ 821,000 $ 59,000 There are three parts to this problem. Use Excel to complete the following: a. Use the SUM function to calculate the “Change in Cash” for each company in the Student Work Area. b. Create a separate waterfall chart for each company showing the amount of cash flow by cash flow activity and the changes in cash flow. Include a descriptive chart title, axes labels, properly formatted axes, and a legend for each chart. c. What generalizations can you make about this industry’s cash flow based on the chart in part b? Describe in general how the companies obtained its…
- Classifying an Operating Activity, Investing Activity, Financing Acticity. + is cash inflow, - is cash outflow for statement of cash flows. 1) Acquired 46,000 cash from issue of common stock. FA + 2)Paid 13,100 cash in advance for rent. Period, April 1 year 1, to March 31 year 2. OA - 5) Collected 72,000 cash from accounts recievable. OA + 6) Paid 32,000 cash for salary expense. OA - 7) Paid 32,400 cash as partial payment for accounts payable. OA - Are these classified correct?B. Application and Creation1. Case A – Algeria Co.Below are the cash transactions of Alderia Co. for December 31, 2015.Cash payment to suppliers of goods and services(25,000)Cash receipts from rendering of services 50,000Payment to owners (5,000)Proceeds from bank loans 25,000Proceeds from cash investment of owners 115,000Payment for acquisition of equipment 100,000Cash at the beginning of the year 1,000,000Instructions: Prepare the statement of cash flow using the indirect method.After which, answer the following questions. How much is cash flow from operating activities? How much is cash flow from investing activities? How much is cash flow from financing activities? How much is the net increase or decrease in cash for the year? How much is cash as at December 31, 2015?A company settles a long-term note payable plus interest by paying $68,000 cash toward the principal amount and $5,440 cash for interest. The amount reported as a use of cash under cash flows from financing activities is a. $0; this is an investing activity. b. $0; this is an operating activity. c. $73,440. d. $68,000. e. $5,440.