EBK FUNDAMENTALS OF FINANCIAL ACCOUNTIN
5th Edition
ISBN: 8220102801462
Author: PHILLIPS
Publisher: YUZU
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Question
Chapter 12, Problem 12.10E
1.
To determine
To compute: The cash flows from operating activities using the indirect method.
2.
To determine
To explain: The major reasons that Incorporation PIwas able to report positive cash flow from operations despite having a net loss.
3.
To determine
To explain: The potential causes of differences between cash flow from operations and net income that are most important to financial analysts.
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Cyberdyne Systems and Virtucon are competitors focusing on the latest technologies. Selected financial data is provided below.
($ in millions)
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Cyberdyne
$43,905
10,537
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15,465
62,905
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Operating cash flows
Total assets, beginning
Total assets, ending
Required:
1. Calculate the return on assets for both companies.
2. Calculate the cash return on assets for both companies.
3. Calculate the cash flow to sales ratio and the asset turnover ratio for both companies.
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Complete this question by entering your answers in the tabs below.
Required 1 Required 2
Virtucon
$7,084
1,488
1,600
16,584
16,284
Cyberdyne
Calculate the cash return on assets for both companies.
Note: Round your answers to 1 decimal place. Enter your answers in millions (i.e., $10,100,000 should be entered as 10.1).
Virtucon
Required 3 Required 4
($ in millions)
Cash Return on Assets
Numerator + Denominator
Amounts
0
0
Next >
You are researching Time Manufacturing and have found the following accounting statement of cash flows for the most recent year.
You also know that the company paid $98.1 million in current taxes and had an interest expense of $48.1 million.
Operations
Net income
Depreciation
TIME MANUFACTURING
Statement of Cash Flows
(in millions)
Deferred taxes
Changes in assets and liabilities
Accounts receivable
Inventories
Accounts payable
Accrued expenses
Other
Total cash flow from operations
Investing activities
Acquisition of fixed assets
Sale of fixed assets
Total cash flow from investing activities
Financing activities
Retirement of long-term debt
Proceeds from long-term debt sales
Dividends
Repurchase of stock
Proceeds from new stock issue
Total cash flow from financing activities
Change in cash (on balance sheet)
a. Calculate the operating cash flow.
b. Calculate the net capital spending.
c. Calculate the change in net working capital.
d. Calculate the cash flow to creditors.
e. Calculate…
Suppose your company sells goods for $300, of which $200 is received in cash and $100 is onaccount. The goods cost your company $125 and were paid for in a previous period. Your companyalso recorded salaries and wages of $70, of which only $30 has been paid in cash.Required:1. Show the journal entries to record these transactions.2. Calculate the amount that should be reported as net cash flow from operating activities.3. Calculate the amount that should be reported as net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?
Chapter 12 Solutions
EBK FUNDAMENTALS OF FINANCIAL ACCOUNTIN
Ch. 12 - Compare the purposes of the income statement, the...Ch. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Describe the types of items used to compute cash...Ch. 12 - Under the indirect method, depreciation expense is...Ch. 12 - Prob. 8QCh. 12 - Explain why a 50,000 increase in inventory during...Ch. 12 - Prob. 10Q
Ch. 12 - As a junior analyst, you are evaluating the...Ch. 12 - Prob. 12QCh. 12 - Prob. 13QCh. 12 - Prob. 14QCh. 12 - (Supplement 12A) How is the sale of equipment...Ch. 12 - Prob. 1MCCh. 12 - Prob. 2MCCh. 12 - Prob. 3MCCh. 12 - Prob. 4MCCh. 12 - Which of the following would not appear in the...Ch. 12 - Prob. 6MCCh. 12 - Prob. 7MCCh. 12 - Prob. 8MCCh. 12 - The total change in cash as shown near the bottom...Ch. 12 - Prob. 10MCCh. 12 - Prob. 12.1MECh. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.5MECh. 12 - Computing Cash Flows from Investing Activities...Ch. 12 - Computing Cash Flows from Financing Activities...Ch. 12 - Computing Cash Flows Under IFRS Using the data...Ch. 12 - Prob. 12.9MECh. 12 - Interpreting Cash Flows from Operating, Investing,...Ch. 12 - Matching Items Reported to Cash Flow Statement...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.13MECh. 12 - Matching items Reported to Cash Flow Statement...Ch. 12 - Prob. 12.2ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16ECh. 12 - Prob. 12.17ECh. 12 - Prob. 12.18ECh. 12 - Prob. 12.19ECh. 12 - Prob. 12.20ECh. 12 - Prob. 12.21ECh. 12 - Prob. 12.22ECh. 12 - (Supplement 12B) Preparing a Statement of Cash...Ch. 12 - Determining Cash Flow Statement Effects of...Ch. 12 - Prob. 12.2CPCh. 12 - Preparing a Statement of Cash Flows (Indirect...Ch. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CPCh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PACh. 12 - Prob. 12.2PACh. 12 - Prob. 12.3PACh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Computing Cash Flows from Operating Activities...Ch. 12 - Prob. 12.6PACh. 12 - (Supplement 12A) Preparing and Interpreting a...Ch. 12 - Prob. 12.1PBCh. 12 - Prob. 12.2PBCh. 12 - Prob. 12.3PBCh. 12 - Preparing and Interpreting a Statement of Cash...Ch. 12 - Prob. 12.5PBCh. 12 - Prob. 12.6PBCh. 12 - Prob. 12.1SDCCh. 12 - Prob. 12.2SDCCh. 12 - Prob. 12.6SDCCh. 12 - Prob. 12.7SDCCh. 12 - Prob. 12.8SDCCh. 12 - Prob. 12.9SDCCh. 12 - Prob. 12.1CC
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