The CharmCity Pharm Inc has an operating cash flow of $358,000 and a cash flow to creditors of $213,400 for the past year. The firm reduced its net working capital by $67,000 and incurred net capital spending of $140,200. What is the amount of the cash flow to stockholders for the last year? A. $86,700 B. $61,200 C. $71,400 D. $79,700 E. $95,700

The CharmCity Pharm Inc has an operating cash flow of $358,000 and a cash flow to creditors of $213,400 for the past year. The firm reduced its net working capital by $67,000 and incurred net capital spending of $140,200. What is the amount of the cash flow to stockholders for the last year? A. $86,700 B. $61,200 C. $71,400 D. $79,700 E. $95,700

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 29BEB

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Lucas Hunter, president of Simmons Industries Inc., believes that reporting operating cash flow per share on the income statement would be a useful addition to the companys just completed financial statements. The following discussion took place between Lucas Hunter and Simmons controller, John Jameson, in January, after the close of the fiscal year: Lucas: Ive been reviewing our financial statements for the last year. I am disappointed that our net income per share has dropped by 10% from last year. This wont look good to our shareholders. Is there anything we can do about this? John: What do you mean? The past is the past, and the numbers are in. There isnt much that can be done about it. Our financial statements were prepared according to generally accepted accounting principles, and I dont see much leeway for significant change at this point. Lucas: No, no. Im not suggesting that we cook the books. But look at the cash flow from operating activities on the statement of cash flows. The cash flow from operating activities has increased by 20%. This is very good newsand, I might add, useful information. The higher cash flow from operating activities will give our creditors comfort. John: Well, the cash flow from operating activities is on the statement of cash flows, so I guess users will be able to see the improved cash flow figures there. Lucas: This is true, but somehow I think this information should be given a much higher profile. I dont like this information being buried in the statement of cash flows. You know as well as I do that many users will focus on the income statement. Therefore, I think we ought to include an operating cash flow per share number on the face of the income statementsomeplace under the earnings per share number. In this way, users will get the complete picture of our operating performance. Yes, our earnings per share dropped this year, but our cash flow from operating activities improved! And all the information is in one place where users can see and compare the figures. What do you think? John: Ive never really thought about it like that before. I guess we could put the operating cash flow per share on the income statement, underneath the earnings per share amount. Users would really benefit from this disclosure. Thanks for the ideaIll start working on it. Lucas: Glad to be of service. How would you interpret this situation? Is John behaving in an ethical and professional manner?
Farmington Corporation began the year with a retained earnings balance of $20,000. The company paid a total of $3,000 in dividends and earned a net income of $60,000 this year. What is the ending retained earnings balance?
Montana Incorporated began the year with a retained earnings balance of $50,000. The company paid a total of $5,000 in dividends and experienced a net loss of $25,000 this year. What is the ending retained earnings balance?
Tart Restaurant Holdings, Incorporated began the year with a retained earnings balance of $950,000. The company paid a total of $14,000 in dividends and experienced a net loss of $20,000 this year. What is the ending retained earnings balance?
For the current year, Vidalia Company reported revenues of 250,000 and expenses of 225,000. At the beginning of the year, its retained earnings had a balance of 95,000. During the year, Vidalia paid 11,000 dividends to shareholders. Its contributed capital was 56,000 at the beginning of the year, and it did not issue any new stock during the year. Vidalias assets total 237,500 on December 31 of the current year. What are Vidalias total liabilities on December 31 of the current year?
Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Stricklers sales last year were 3,250,000 (all on credit), and its net profit margin was 7%. Its inventory turnover was 6.0 times during the year, and its DSO was 41 days. Its annual cost of goods sold was 1,800,000. The firm had fixed assets totaling 535,000. Stricklers payables deferral period is 45 days. a. Calculate Stricklers cash conversion cycle. b. Assuming Strickler holds negligible amounts of cash and marketable securities, calculate its total assets turnover and ROA. c. Suppose Stricklers managers believe the annual inventory turnover can be raised to 9 times without affecting sale or profit margins. What would Stricklers cash conversion cycle, total assets turnover, and ROA have been if the inventory turnover had been 9 for the year?
During 20X2, Evans Company had the following transactions: a. Cash dividends of 6,000 were paid. b. Equipment was sold for 2,880. It had an original cost of 10,800 and a book value of 5,400. The loss is included in operating expenses. c. Land with a fair market value of 15,000 was acquired by issuing common stock with a par value of 3,600. d. One thousand shares of preferred stock (no par) were sold for 4.20 per share. Evans provided the following income statement (for 20X2) and comparative balance sheets: Required: Prepare a worksheet for Evans Company.
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.
Net income and dividends The income statement of a corporation for the month of November indicates a net income of $90,000. During the same period, $100,000 in cash dividends were paid. Would it be correct to say that the business incurred a net loss of $10,000 during the month? Discuss.
During 20X2, Norton Company had the following transactions: a. Cash dividends of 20,000 were paid. b. Equipment was sold for 9,600. It had an original cost of 36,000 and a book value of 18,000. The loss is included in operating expenses. c. Land with a fair market value of 50,000 was acquired by issuing common stock with a par value of 12,000. d. One thousand shares of preferred stock (no par) were sold for 14 per share. Norton provided the following income statement (for 20X2) and comparative balance sheets: Required: Prepare a worksheet for Norton Company.
6) During the year, Lasko's repaid $12,500 in long-term debt, borrowed $8,400, paid $611 in interest and $740 in dividends, and had an operating cash flow of $16,207. The firm acquired $33,500 in new fixed assets and sold $8,400 of old assets. Net working capital declined by $1,592 during the year. What is the annual cash flow to stockholders?
The Lakeside Inn had operating cash flow of $55,550 and firm's net capital spending was $14,000. Also, the firm decreased net working capital by $2,500 from prior year. Depreciation was $8,700 and interest paid was $18,800. No new long-term debt was issued. What is the amount of the cash flow to stockholders?