Financial Accounting (12th Edition) (What's New in Accounting)

12th Edition

ISBN: 9780134725987

Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.

Publisher: PEARSON

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Concept explainers

Reporting Cash Flows

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

Balance Sheet

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial Statements

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Owner's Capital

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…

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Textbook Question

Chapter 11, Problem 11.67BP

(Learning Objectives 2, 4: Prepare an income statement, balance sheet, and statement of cash flows—direct method) Use the Vintage Motors data from P11-66B.

Requirements

1. Prepare Vintage’s income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses together.
2. Prepare Vintage’s balance sheet at December 31, 2018.
3. Prepare Vintage’s statement of cash flows for the year ended December 31, 2018. Format cash flows from operating activities using the direct method.

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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Chapter 11, Problem 11.66BP

Chapter 11, Problem 11.68BP

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(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity using ratios) The comparative financial statements of Diamond Pools, Inc.,for 2020, 2019, and 2018 included the following select data:Balance sheetCurrent assets:Cash...............................................Investment in trading securities......Receivables, net of allowancefor uncollectible accounts of $7,$6, and $4, respectivelyInventories .....................................Prepaid expenses............................Total current assets........................Total current liabilities.......................Income statementNet sales (all on account)...................(In millions)2020$ 9015027034050$ 900$ 550$7,7002019$ 9518028035540$ 950$ 640$5,3552018$ 6011523032535$ 765$ 650$4,745Requirements1. Compute the following ratios for 2020 and 2019:a. Current ratiob. Quick (acid-test) ratioc. Days’ sales outstanding2. Which ratios improved from 2019 to 2020 and which ratios deteriorated?…

P11-77. (Learning Objectives 2, 3: Prepare a balance sheet from a statement of cash flows)The December 31, 2017, balance sheet and the 2018 statement of cash flows for McFarlandCorporation follow: Requirement1. Prepare the December 31, 2018, balance sheet for McFarland.

(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity through ratios) Norfolk Co., Inc., an electronics and appliance chain,reported these figures in millions of dollars:Net sales .........................................Receivables at end of year...............2019$398,5003,8602018$418,5004,110Requirements1. Compute Norfolk’s days’ sales in receivables or days’ sales outstanding (DSO) during 2019.(For this exercise, use “net sales” for “net credit sales” when calculating ratios.)2. Is Norfolk’s DSO long or short? Nico Networks takes 39 days to collect its average levelof receivables. Divencenzo, the overnight shipper, takes 33 days. What causes Norfolk’scollection period to be so different?

Chapter 11 Solutions

Financial Accounting (12th Edition) (What's New in Accounting)

Ch. 11 - Quick Check (Answers are given here) The statement...Ch. 11 - Prob. 2QC Ch. 11 - Prob. 3QC Ch. 11 - Which of the three types of activities reported on...Ch. 11 - Prob. 5QC Ch. 11 - On the statement of cash flows, which of the...Ch. 11 - On the statement of cash flows, which of the...Ch. 11 - Prob. 8QC Ch. 11 - Prob. 9QC Ch. 11 - Which of the following transactions does not...

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Using the financial statements and additional information below, construct an indirect cash flow statement in Excel for year 4. As long as you are following general cash flow formatting rules (e.g. operating section, investing section, financing section), you can format it as you see fit. Remember that these reports should be clean, easy to read and understand, and useful for decision-making purposes.
(Learning Objectives 1, 7: Show how to speed up cash flow from receivables;evaluate liquidity through ratios) Geneva Co., Inc., an electronics and appliance chain,reported these figures in millions of dollars:Net sales .........................................Receivables at end of year...............2019$523,1253,8602018$543,1254,510Requirements1. Compute Geneva’s days’ sales in receivables or days’ sales outstanding (DSO) during2019. (For this exercise, use “net sales” for “net credit sales” when calculating ratios.)2. Is Geneva’s DSO long or short? Kurzwel Networks takes 39 days to collect its averagelevel of receivables. Domarko Freight, the overnight shipper, takes 33 days. What causesGeneva’s collection period to be so different?
Examine the Statement of Cash flows and the accompanying notes to the financial statements found in the Annual Report that you have downloaded for Question 2. Required: Comment on the company’s cash flows for the latest period. The write-up must not exceed 400 words.

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