Financial and Managerial Accounting - With CengageNow
14th Edition
ISBN: 9781337577809
Author: WARREN
Publisher: CENGAGE L
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 2ADM
A.
To determine
Statement of cash flows:
Statement of cash flow is a financial statement that shows the cash and cash equivalents of a company for a particular period of time. It shows the net changes in cash, by reporting the sources and uses of cash as a result of operating, investing, and financing activities of a company.
Free cash flow describes the net cash provided from operating activities after making required adjustments for dividends and capital expenditures. In other words, it is the cash flow arrived after making payment for capital expenditures and dividend payments.
To Determine: The free cash flow.
B.
To determine
To Compute: The ratio of free cash flow to sales.
C.
To determine
Whether the free cash flow information indicate financial stress.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Because of its inability to pay its debts, the KDC Manufacturing Company has been forced
into bankruptcy as of June 30, 2021. The Statement of Financial Position on that date
shows.
Cash
Accounts Receivable
Notes Receivable
Inventories
Prepaid Expenses
Land and Buildings
Equipment
ASSETS
TOTAL
c. 48%
d. 50%
5,665 Accounts Payable
39,350 Notes Payable - BPI
18,500 Notes Payable -
Suppliers
87,850 Accrued Wages
950 Accrued Taxes
61,250 Mortgage Bond
Payable
LIABILITIES and EQUITY
48,800 Common Stock -
P100 par
a. 4,355
b. 4,550
c. 3,120
d. 6,500
P262,365 TOTAL
15. The estimated loss on asset disposition is
a. 29,240
b. 112,740
c. 111,790
d. 82,550
16. What is the estimated gain on asset disposition?
a. 33,750
b. 41,000
c. 34,700
d. 0
17. The expected recovery percentage is:
a. 67%
b. 70%
Retained Earnings
52,500
15,000
51,250
Additional Information:
Only P16,110 of Accounts Receivable and P12,500 of Notes Receivable are expected
to be collectible. The good notes are pledged to Bank of…
A. Sold the building for $120,000 and paid the loan.
B. Collected $10,000 from the accounts receivable. Remainder is uncollectible
C. Sold the equipment for $8,000
D. Paid the salaries and taxes payable.
E. Sold all remaining inventory for $8,000
F. Paid liquidation costs.
G. Distributed settlement to remaining creditors
Bottomless Pit
Statement of Realization and Liquidation
For the Month Ended May 31, 200X
Non Cash
Loan
Salary
Liq Costs
Taxes
Accounts
Cash
Assets
Payable
Payable
Payable
Payable
Payable
Deficit
Book Balances May 1
$2,000
$188,000
$115,000
$5,000
$5,000
$10,000
$80,000
($25,000)
Sold building and paid loan
Collected accounts receivable
Sold equipment
Paid salaries and taxes
Sold inventory
Paid liquidation costs
Paid settlement to creditors
Book balances May 31
The following information is taken from Jennifer Corporation's financial statements:
December 31
2021
2020
Cash
$ 73,080
$ 31,320
Accounts receivable
118,320
92,800
Allowance for doubtful accounts
(5,220)
(3,596)
Inventory
185,600
203,000
Prepaid expenses
8,700
7,888
Land
116,000
69,600
Buildings
341,040
283,040
Accumulated depreciation
(37,120)
(15,080)
Patents
23,200
40,600
$823,600
$709,572
Accounts payable
$ 104,400
$ 97,440
Accrued liabilities
62,640
73,080
Bonds payable
145,000
69,600
Common stock
116,000
116,000
Retained earnings―appropriated
92,800
11,600
Retained earnings―unappropriated
320,160
351,132
Treasury stock, at cost
(17,400)
(9,280)
$823,600
$709,572
For 2021 Year
Net income
$90,828…
Chapter 13 Solutions
Financial and Managerial Accounting - With CengageNow
Ch. 13 - Prob. 1DQCh. 13 - Prob. 2DQCh. 13 - A corporation issued 2,000,000 of common stock in...Ch. 13 - A retail business, using the accrual method of...Ch. 13 - If salaries payable was 100,000 at the beginning...Ch. 13 - Prob. 6DQCh. 13 - A corporation issued 2,000,000 of 20-year bonds...Ch. 13 - Fully depreciated equipment costing 50,000 was...Ch. 13 - Prob. 9DQCh. 13 - Name five common major classes of operating cash...
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Prob. 13.2BECh. 13 - Prob. 13.3BECh. 13 - Prob. 13.4BECh. 13 - Land transactions on the statement of cash flows...Ch. 13 - Common stock transactions on the statement of cash...Ch. 13 - Prob. 13.7BECh. 13 - Prob. 13.8BECh. 13 - Prob. 13.1EXCh. 13 - Effect of transactions on cash flows State the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Prob. 13.4EXCh. 13 - Prob. 13.5EXCh. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Prob. 13.8EXCh. 13 - Reporting changes in equipment on statement of...Ch. 13 - Prob. 13.10EXCh. 13 - Determining cash payments to stockholders The...Ch. 13 - Prob. 13.12EXCh. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Prob. 13.14EXCh. 13 - Prob. 13.15EXCh. 13 - Prob. 13.16EXCh. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Prob. 13.19EXCh. 13 - Prob. 13.20EXCh. 13 - Cash flows from operating activities direct method...Ch. 13 - Prob. 13.22EXCh. 13 - Prob. 13.1APRCh. 13 - Prob. 13.2APRCh. 13 - Prob. 13.3APRCh. 13 - Prob. 13.4APRCh. 13 - Statement of cash flows direct method applied to...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows indirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows direct method The...Ch. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Prob. 1ADMCh. 13 - Prob. 2ADMCh. 13 - Prob. 3ADMCh. 13 - Priceline: Free cash flow Priceline Group, Inc. is...Ch. 13 - Prob. 13.1TIFCh. 13 - Prob. 13.3TIF
Knowledge Booster
Similar questions
- The following information is taken from Jennifer Corporation's financial statements: December 31 2021 2020 Cash $ 73,080 $ 31,320 Accounts receivable 118,320 92,800 Allowance for doubtful accounts (5,220) (3,596) Inventory 185,600 203,000 Prepaid expenses 8,700 7,888 Land 116,000 69,600 Buildings 341,040 283,040 Accumulated depreciation (37,120) (15,080) Patents 23,200 40,600 $823,600 $709,572 Accounts payable $ 104,400 $ 97,440 Accrued liabilities 62,640 73,080 Bonds payable 145,000 69,600 Common stock 116,000 116,000 Retained earnings―appropriated 92,800 11,600 Retained earnings―unappropriated 320,160 351,132 Treasury stock, at cost (17,400) (9,280) $823,600 $709,572 For 2021 Year Net income…arrow_forwardABC Corporation is experiencing difficulty in paying its bills and is considering filing for bankruptcy. Current data show: Assets Cash Accounts Receivable Inventory - Materials Inventory - Finished Goods Prepaid Expenses Land Building Trucks Equipment Intangibles Total Assets SAPIES Shareholders' Equity Total Liabilities and Equity Compute for the Net Free Assets OLINES Book Value 4,000 40,000 36,000 50,000 1,000 10,000 70,000 20,000 45,000 16,000 P292,000 UNIVERSI 110,000 (38,000) P292,000 Est.Realizable Value 0 Liabilities Secured by: P 77,000911 Accounts Payable Bank Loan Reminder from the $25,000andbook: Code of 70% of receivables Wages Payable Cheating during exam12,000, quizzes or plagiarism in connection Taxes Payable with any academic wo 8,000ting of the same: 1st violation- Truck Loan warning with invalidat5,000rade; Truck with P12,000 BV & P2,500 ERV Mortgage Payablespension with inva43,000f grade; 3rd violatiLand and Building Loan Payable to dismissal/ non-re-50,000 with…arrow_forwardMandy and Sandy are partners sharing Profit-Loss in the proportion of 4:2. The balance sheet of their firm as on 31-12-2019 is as follows: Particulars Amount in $ Amount in $ Assets: Fixed Assets: Land and Building Machinery 67000 70000 Total Fixed Assets 137000 Current Assets: Inventory 22000 Debtors 16000 Less: Bad debt Reserve 1000 15000 Cash Balance 71000 108000 Total Assets 245000 Liabilities and Equity: Partner's capital Accounts: 68000 Mandy Sandy 49000 117000 6000 General Reservearrow_forward
- The COCO Manufacturing Company has been forced into bankruptcy as of April 30, 2022. The statement of financial position on that date shows: ASSETS:Cash P 2,700Accounts Receivable 39,350Notes Receivable 18,500 Inventories 87,850Prepaid Expenses 950 Land and Buildings 61,250Equipment 48,800 Retained Earnings (30,850)Total ? LIABILITIES AND EQUITY: Accounts Payable P52,500 Notes Payable - PNB 15,000 Notes Payable - Suppliers 51,250 Accrued Wages 1,850 Accrued Taxes 4,650 Mortgage Bonds Payable 90,000 Common Stock - P 100 par 75,000 Total ? Additional Information:▪Accounts Receivable of P 16,110 and Noted Receivable of P 12,500 are expected to be…arrow_forwardBecause of the inability to pay debts, Steven Company has been forced into bankruptcy as of April 30, 2021. The statement of financial position on that date shows: Assets Liabilities P 2,700 Accounts Payable 39,350 Notes Payable - PNB 18,500 Notes Payable - Suppliers 87,850 Accrued Wages 950 Accrued Taxes Cash Accounts Receivable P 52,500 15,000 51,250 1,850 Notes Receivable Inventories Prepaid Expenses Land and Buildings 4,650 61,250 Mortgage Bond Payable 90,000 48,800 Ordinary Share - P100 par Accumulated Profit (Deficit) Equipment 75,000 (30,850) P259,400 P259,400 Accounts receivable of P16,110 and notes receivable of P12,500 are expected to be collectible. The good notes are pledged to Phil. National Bank. Inventories are expected to bring in P45,100 when sold under bankruptcy conditions. Land and building have an appraised value of P95,000. They serve as security on the bonds. The current value of the equipment, net of disposal cost is P9,000. The expected recovery percentage…arrow_forwardFlint Corp. Statement of Financial Position For the Year Ended December 31, 2023 Current assets Cash (net of bank overdraft of $40,000 ) $450,000 Accounts receivable (net) Inventory at the lower of cost and net realizable value FV-NI investments (at cost-fair value $320,000 ) Property, plant, and equipment Buildings (net) 590,000 Equipment (net) 190,000 Land held for future use ,265,000 Intangible assets Goodwill Investment in bonds to collect cash flows, at amortized cost 100,000 Prepaid expenses Current liabilities Accounts payable 365,000 Notes payable (due next year) Pension obligation Rent payable 505,000 511,000 340,000 265,000 Long-term liabilities Bonds payable 681,000 Shareholders' equity Common shares, unlimited authorized, 380,000 issued 380,000 Contributed surplus 210,000 Retained earningsarrow_forward
- Assume a company had net income of $61,000. It provided the following excerpts from its balance sheet: This Year Last Year Current assets: Accounts receivable $ 46,000 $ 46,000 Inventory $ 53,000 $ 53,000 Current liabilities: Accounts payable $ 44,000 $ 49,000 Income taxes payable $ 10,000 $ 14,000 If the company did not sell any noncurrent assets during the period and its depreciation charges for the period were $21,000, then based solely on the information provided, the net cash provided by operating activities would be: Multiple Choice $49,000. $31,000. $73,000. $91,000.arrow_forwardThe COCO Manufacturing Company has been forced into bankruptcy as of April 30, 2022. The statement of financial position on that date shows: ASSETS:Cash P 2,700Accounts Receivable 39,350Notes Receivable 18,500 Inventories 87,850Prepaid Expenses 950 Land and Buildings 61,250Equipment 48,800 Retained Earnings (30,850)Total ? LIABILITIES AND EQUITY: Accounts Payable P52,500 Notes Payable - PNB 15,000 Notes Payable - Suppliers 51,250 Accrued Wages 1,850 Accrued Taxes 4,650 Mortgage Bonds Payable 90,000 Common Stock - P 100 par 75,000 Total ? Additional Information:▪Accounts Receivable of P 16,110 and Noted Receivable of P 12,500 are expected to be…arrow_forwardAccrued Interest On May 1, the Garnett Corporation wanted to purchase a $200,000 piece of equipment, but Garnett was only able to furnish $75,000 of its own cash to purchase the equipment. Garnett borrowed the remainder of the $200,000 from the Peoples National Bank on a 3-year, 4% note. Required: If the company keeps its records on a calendar year, what adjusting entry should Garnett make on December 31?arrow_forward
- Keurig Green Mountain's Current Liabilities Following is the current assets and current liabilities portion of the balance sheet of Keurig Green Mountain for the years ended September 26, 2015, and September 27, 2014: (Dollars in thousands) September 26, 2015 September 27, 2014 Current assets: Cash and cash equivalents $59,334 $761,214 Restricted cash and cash equivalents 30,460 378 Short-term investment — 100,000 Receivables, less uncollectible accounts and return allowances of $35,459 and $66,120 at September 26, 2015 and September 27, 2014, respectively 517,936 621,451 Inventories 691,980 835,167 Income taxes receivable 51,786 — Other current assets 95,526 69,272 Deferred income taxes, net 70,181 58,038 Total current assets $1,517,203 $2,445,520 Current liabilities: Current portion of long-term debt…arrow_forwardComputing the change in cash; identifying non-cash transactions Jennifer’s Wedding Shops earned a net income of $27,000, which included depreciation of $16,000. Jennifer’s acquired a $119,000 building by borrowing $119,000 on a long-term note payable. Requirements How much did Jennifer’s cash balance increase or decrease during the year? Were there any non-cash transactions for the company? If so, show how they would be reported in the statement of cash flows.arrow_forwardKeurig Green Mountain's Current Liabilities Following is the current assets and current liabilities portion of the balance sheet of Keurig Green Mountain for the years ended September 26, 2015, and September 27, 2014: (Dollars in thousands) September 26, 2015 September 27, 2014 Current assets: Cash and cash equivalents $59,334 $761,214 Restricted cash and cash equivalents 30,460 378 Short-term investment — 100,000 Receivables, less uncollectible accounts and return allowances of $35,459 and $66,120 at September 26, 2015 and September 27, 2014, respectively 517,936 621,451 Inventories 691,980 835,167 Income taxes receivable 51,786 — Other current assets 95,526 69,272 Deferred income taxes, net 70,181 58,038 Total current assets $1,517,203 $2,445,520 Current liabilities: Current portion of long-term debt…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Financial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
College Accounting, Chapters 1-27
Accounting
ISBN:9781337794756
Author:HEINTZ, James A.
Publisher:Cengage Learning,
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning