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 3SE
To determine
Write a brief memo to explain the purposes of the statement of cash flows.
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S1-10. (Learning Objective 4: Explain aspects of financial statements) Apply yourunderstanding of the relationships among the financial statements to answer thesequestions.a. How can a business earn large profits but have a small balance of retained earnings?b. Give two reasons why a business can have a steady stream of net income over a fiveyear period and still experience a cash shortage.c. If you could pick a single source of cash for your business, what would it be? Why?d. How can a business be unprofitable several years in a row and still have plenty of cash?
Direction: 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.
Learning is Fun Company has presented the following in order to aid the account in preparing CFS during the month.
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
Compute for the cash generated/used in financing activities.
Based on the given above, compute for the net change in cash for the year.
(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, 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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