Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Chapter 11, Problem 31AP
To determine
Prepare the statement of cash flows for the year using the indirect method to report operating activities and list noncash investing and financing activities on an accompanying schedule.
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(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 Norfolkβs daysβ sales in receivables or daysβ sales outstanding (DSO) during 2019.(For this exercise, use βnet salesβ for βnet credit salesβ when calculating ratios.)2. Is Norfolkβs DSO long or short? Nico Networks takes 39 days to collect its average levelof receivables. Divencenzo, the overnight shipper, takes 33 days. What causes Norfolkβscollection period to be so different?
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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. Daysβ sales outstanding2. Which ratios improved from 2019 to 2020 and which ratios deteriorated?β¦
Chapter 11 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - Prob. 3DQCh. 11 - A company issued bonds during the year. Would this...Ch. 11 - Prob. 5DQCh. 11 - When using the indirect method, why are gains on...Ch. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - Prob. 9DQCh. 11 - Prob. 10DQ
Ch. 11 - Prob. 1SCCh. 11 - Operating activities are most closely related to:...Ch. 11 - Prob. 3SCCh. 11 - Prob. 4SCCh. 11 - Finlay, Inc., earned net income of 63,000 after...Ch. 11 - Prob. 6SCCh. 11 - Prob. 7SCCh. 11 - Prob. 8SCCh. 11 - Prob. 9SCCh. 11 - Elliot Enterprises had operating expenses of...Ch. 11 - Prob. 11SCCh. 11 - Prob. 12SCCh. 11 - Prob. 1SECh. 11 - Prob. 2SECh. 11 - Prob. 3SECh. 11 - Prob. 4SECh. 11 - Prob. 5SECh. 11 - Prob. 6SECh. 11 - Operating activitiesindirect method (Learning...Ch. 11 - Prob. 8SECh. 11 - Operating activitiesdirect method (Learning...Ch. 11 - Prob. 10SECh. 11 - Prob. 11SECh. 11 - Prob. 12SECh. 11 - Prob. 13AECh. 11 - Prob. 14AECh. 11 - Prob. 15AECh. 11 - Preparing a statement of cash flowsindirect method...Ch. 11 - Prob. 17AECh. 11 - Prob. 18AECh. 11 - Prob. 19AECh. 11 - Prob. 20AECh. 11 - Prob. 21AECh. 11 - Prob. 22BECh. 11 - Prob. 23BECh. 11 - Preparing a statement of cash flowsindirect method...Ch. 11 - Prob. 25BECh. 11 - Prob. 26BECh. 11 - Prob. 27BECh. 11 - Prob. 28BECh. 11 - Prob. 29BECh. 11 - Calculating certain information using the direct...Ch. 11 - Prob. 31APCh. 11 - Prob. 32APCh. 11 - Prob. 33APCh. 11 - Prob. 34APCh. 11 - Prob. 35APCh. 11 - Prob. 36APCh. 11 - Prob. 37BPCh. 11 - Prob. 38BPCh. 11 - Prob. 39BPCh. 11 - Prob. 40BPCh. 11 - Prob. 41BPCh. 11 - Prob. 42BPCh. 11 - Prob. 1CECh. 11 - Prob. 1CPCh. 11 - Apply Your Knowledge Ethics In Action Case 1....Ch. 11 - Case 2. Kevin Sailors, the CEO of Candle...Ch. 11 - Financial Analysis Purpose: To help to familiarize...Ch. 11 - Prob. 1IACh. 11 - Small Business Analysis Purpose: To help you...Ch. 11 - Written Communication Prepare a paper outlining...Ch. 11 - Comprehensive Problem The Accounting Cycle and...
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- S1-11. (Learning Objective 4: Identify appropriate financial statement use) For each of thefollowing questions, indicate which financial statement would most likely be used to providethe information. Use the following abbreviations: Income statement (I), Statement of retainedearnings (R), Balance sheet (B), and Statement of cash flows (C).a. What were the companyβs net sales for the year?b. What assets does the company have?c. How much cash was generated by operating activities?d. Why did the companyβs retained earnings change during the year?e. How much in total debt does the company have?f. How well did the company perform during the year?g. Did the company declare a dividend during the year?h. How much cash did the company generate and spend during the year?i. What is the companyβs financial position at the end of the year?arrow_forwardDirection: Study the given data below and compute for (1) the cash generated/used in financing activities, (2) the net change in cash for the year, and (3) prepare the CFS for the year.Β Β Learning is Fun Company has presented the following in order to aid the account in preparing CFS during the month. Β Net income: P200, 000 Depreciation expense: P25, 000 Gain on sale on property and equipment: P100. 000 Decrease in trade and other receivables: P 70, 000 Purchase of property and equipment: P200, 000 Payment of loan from bank: P150, 000 Β Compute for the cash generated/used in financing activities. Based on the given above, compute for the net change in cash for the year.arrow_forwardS1-9. (Learning Objective 4: Identify appropriate financial statement) Suppose you areanalyzing the financial statements of Corley, Inc. Identify each item with its appropriatefinancial statement, using the following abbreviations: Income statement (I), Statement ofretained earnings (R), Balance sheet (B), and Statement of cash flows (C). Three items appearon two financial statements, and one item shows up on three statements.a. Salary expenseb. Dividendsc. Accounts payabled. Net incomee. Common stockf. Inventoryg. Interest revenueh. Cashi. Retained earningsj. Long-term debtk. Increase or decrease in cashl. Net cash provided by operatingactivitiesm. Sales revenuen. Net cash used for financingactivitiesarrow_forward
- (Learning Objective 7: Evaluate liquidity using the quick [acid-test] ratio and daysβsales in receivables) Northern Products reported the following amounts in its 2019 financialstatements. The 2018 amounts are given for comparison.2019 2018Current assets:Cash............................................ $ 9,500Short-term investments................ 7,000Accounts receivable..................... $70,100Less: Allowance foruncollectibles.......................$86,500(7,500) (5,500) 64,600Inventory..................................... 190,000Prepaid insurance ........................ 2,200Total current assets..................... 273,300Total current liabilities.................... 106,000Net sales (all on account) ................$ 9,50010,50079,000189,0002,200290,20099,0001,077,000 734,000Requirements1. Compute Northernβs quick (acid-test) ratio at the end of 2019. Round to two decimalplaces. How does the quick ratio compare with the industry average of 0.92?2. Compare daysβ salesβ¦arrow_forwardThe company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners. The owners have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information Maple Group Ltd Comparative Balance Sheet December 31, 2020 and 2019 Β 2020 2019 Increase/(Decrease) Β Β Β Β Β Β Β Assets Β Β Β Β Β Cash and cash equivalent Β ? Β ? Β ? Β Β Accounts Receivable Β Β Β Β Β Β 87,550 Β ? Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 1,550 Β Β Inventories Β Β Β Β Β Β 93,900 Β Β Β Β Β Β Β Β Β 98,540 Β ? Fixed Assets, net Β Β Β Β 160,400 Β ? Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 49,900 Total Assets Β Β Β Β 373,350 Β Β Β Β Β Β Β 316,890 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 56,460 Β Β Β Β Β Liabilities Β Β Β Β Β Accounts payable Β ? Β ? Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 950 Β Β Accrued liabilities Β Β Β Β Β Β 22,850 Β Β Β Β Β Β Β Β Β 24,940 Β ?β¦arrow_forwardThe company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the owners. The owners have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information Maple Group Ltd Comparative Balance Sheet December 31, 2020 and 2019 Β 2020 2019 Increase/(Decrease) Β Β Β Β Β Β Β Assets Β Β Β Β Β Cash and cash equivalent Β ? Β ? Β ? Β Β Accounts Receivable Β Β Β Β Β Β 87,550 Β ? Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 1,550 Β Β Inventories Β Β Β Β Β Β 93,900 Β Β Β Β Β Β Β Β Β 98,540 Β ? Fixed Assets, net Β Β Β Β 160,400 Β ? Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 49,900 Total Assets Β Β Β Β 373,350 Β Β Β Β Β Β Β 316,890 Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 56,460 Β Β Β Β Β Liabilities Β Β Β Β Β Accounts payable Β ? Β ? Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β Β 950 Β Β Accrued liabilities Β Β Β Β Β Β 22,850 Β Β Β Β Β Β Β Β Β 24,940 Β ?β¦arrow_forward
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