GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Question
Chapter 12, Problem 12.15E
1.
To determine
Compute the
2.
To determine
Compute the quality of income ratio.
3.
To determine
Explain the major reason for the quality of income ratio not being equal to one for Company P.
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Salud Company reports the following information.
Selected Annual Income Statement Data
Selected Year-End Balance Sheet Data
Net income
$ 470,000
Accounts receivable increase
$ 49,600
Depreciation expense
97,000
Prepaid expenses decrease
15,900
Gain on sale of machinery
26,900
Accounts payable increase
7,400
Wages payable decrease
2,100
Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31.
Note: Amounts to be deducted should be indicated with a minus sign.
ed information
[The following information applies to the questions displayed below.]
A recent annual report for BubbliCo contained the following information for the period (dollars in millions):
Net income
Depreciation and amortization
Increase in accounts receivable
Increase in inventory
Increase in prepaid expense
Increase in accounts payable
Decrease in taxes payable
Increase in other current liabilities
Cash dividends paid
Share repurchases
BUBBLICO
Statement of Cash Flows (Partial)
$5,144
1,551
569
362
Cash flows from operating activities:
Required:
1. Compute cash flows from operating activities for BubbliCo using the indirect method.
Note: List cash outflows as negative amounts. Enter your answers in millions.
68
727
199
743
Adjustments to reconcile net income to cash flow from operating activities:
2,559
4,721
$
0
Salud Company reports the following information.
Selected Annual Income Statement Data
Selected Year-End Balance Sheet Data
$ 500,000 Accounts receivable increase
97,500 Prepaid expenses decrease
26,600 Accounts payable increase
Wages payable decrease
$ 53,200
12,600
Net income
Depreciation expense
Gain on sale of machinery
7,200
3,500
Use the indirect method to prepare the operating activities section of its statement of cash flows for the year ended December 31.
(Amounts to be deducted should be indicated with a minus sign.)
Statement of Cash Flows (partial)
es
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operating activities
Income statement items not affecting cash
Changes in current operating assets and liabilities
Chapter 12 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 12 - Prob. 1QCh. 12 - Prob. 2QCh. 12 - Prob. 3QCh. 12 - What are the major categories of business...Ch. 12 - Prob. 5QCh. 12 - Prob. 6QCh. 12 - Prob. 7QCh. 12 - Prob. 8QCh. 12 - Compare the two methods of reporting cash flows...Ch. 12 - Prob. 10Q
Ch. 12 - Prob. 11QCh. 12 - What are noncash investing and financing...Ch. 12 - Prob. 13QCh. 12 - Prob. 1MCQCh. 12 - Prob. 2MCQCh. 12 - Prob. 3MCQCh. 12 - Prob. 4MCQCh. 12 - Prob. 5MCQCh. 12 - Prob. 6MCQCh. 12 - Prob. 7MCQCh. 12 - Prob. 8MCQCh. 12 - Prob. 9MCQCh. 12 - Prob. 10MCQCh. 12 - Prob. 12.1MECh. 12 - Determining the Effects of Account Changes on Cash...Ch. 12 - Prob. 12.3MECh. 12 - Prob. 12.4MECh. 12 - Prob. 12.5MECh. 12 - Prob. 12.6MECh. 12 - Prob. 12.7MECh. 12 - Prob. 12.1ECh. 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 - Reporting and Interpreting Cash Flows from...Ch. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Inferring Balance Sheet Changes from the Cash Flow...Ch. 12 - (Chapter Supplement B) Computing and Reporting...Ch. 12 - During the period, Sanchez Company sold some...Ch. 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 - (Chapter Supplement A) Reporting and Interpreting...Ch. 12 - Prob. 12.23ECh. 12 - Prob. 12.24ECh. 12 - Prob. 12.1PCh. 12 - Prob. 12.2PCh. 12 - Prob. 12.3PCh. 12 - Prob. 12.4PCh. 12 - Prob. 12.5PCh. 12 - (Chapter Supplement C) Preparing a Statement of...Ch. 12 - Prob. 12.1APCh. 12 - Prob. 12.2APCh. 12 - Prob. 12.3APCh. 12 - Prob. 12.1CONCh. 12 - Prob. 12.1CPCh. 12 - Prob. 12.2CPCh. 12 - Prob. 12.3CPCh. 12 - Prob. 12.4CPCh. 12 - Prob. 12.5CPCh. 12 - Prob. 12.6CP
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Similar questions
- Partial Statement of Cash Flows Service Company had net income during the current year of $65,800. The following information was obtained from Services balance sheet: Accounts receivable $26,540 increase Inventory 32,180 increase Accounts payable 9,300 decrease Interest payable 2,120 increase Accumulated depreciation (Building) 14,590 increase Accumulated depreciation (Equipment) 32,350 increase Additional Information: 1. Equipment with accumulated depreciation of $18,000 was sold during the year. 2. Cash dividends of $29,625 were paid during the year. Required: 1. Prepare the net cash flows from operating activities using the indirect method. 2. CONCEPTUAL CONNECTION How would the cash proceeds from the sale of equipment he reported on the statement of cash flows? 3. CONCEPTUAL CONNECTION How would the cash dividends be reported on the statement of cash flows? 4. CONCEPTUAL CONNECTION What could the difference between net income and cash flow from operating activities signal to financial statement users?arrow_forwardStatement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.arrow_forwardIn the current year, Harrisburg Corporation had net income of 35,000, a 9,000 decrease in accounts receivable, a 7,000 increase in inventory, an 8,000 increase in salaries payable, a 13,000 decrease in accounts payable, and 10,000 in depreciation expense. Using the indirect method, prepare the operating activities section of its statement of cash flows based on this information.arrow_forward
- Help Sa Hampton Company reports the following information for its recent calendar year. Income Statement Data Sales Selected Year-End Balance Sheet Data $ 78,000 Accounts receivable increase $ 7,000 Expenses: Cost of goods sold Salaries expense Depreciation expense Inventory decrease 3, 000 900 42, 000 Salaries payable increase 10, 000 4,000 $ 22,000 Net income Required: Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Statement of Cash Flows (partial) Cash flows from operating activities-indirect method Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash Changes in current operating assets and liabilitiesarrow_forwardApex Company prepared the statement of cash flows for the current year that is shown below: Apex CompanyStatement of Cash Flows—Indirect Method Operating activities: Net income $ 40,400 Adjustments to convert net income to cash basis: Depreciation $ 20,200 Increase in accounts receivable (60,900) Increase in inventory (25,100) Decrease in prepaid expenses 9,600 Increase in accounts payable 53,700 Decrease in accrued liabilities (10,500) Increase in income taxes payable 4,300 (8,700) Net cash provided by (used in) operating activities 31,700 Investing activities: Proceeds from the sale of equipment 15,200 Loan to Thomas Company (41,100) Additions to plant and equipment (121,100) Net cash provided by (used in) investing activities (147,000) Financing activities: Increase in bonds payable 89,700 Increase in common stock 39,300 Cash dividends (29,600) Net cash provided by (used in) financing…arrow_forwardHampton Company reports the following information for its recent calendar year. Selected Year-End Balance Sheet Data Accounts receivable increase $ 77,000 Inventory decrease 41,000 Salaries payable increase 12,000 4,000 $ 20,000 Income Statement Data Sales Expenses: Cost of goods sold Salaries expense Depreciation expense Net income Required: Prepare the operating activities section of the statement of cash flows using the indirect method. Note: Amounts to be deducted should be indicated with a minus sign. Statement of Cash Flows (partial) Cash flows from operating activities-indirect method Adjustments to reconcile net income to net cash provided by operating activities Income statement items not affecting cash $ 5,000 5,000 900 Changes in current operating assets and liabilitiesarrow_forward
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