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A.
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.
The free cash flow.
B.
To Compute: The ratio of free cash flow to sales.
C.
Whether the free cash flow information indicate financial stress.
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Chapter 13 Solutions
Bundle: Managerial Accounting, Loose-leaf Version, 14th - Book Only
- 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 31arrow_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_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_forward
- Mandy 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_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_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_forward
- Flint 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_forwardAssume 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_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
- Computing 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_forwardI. On January 1, 2018, Grand Corp. purchased Minor Co., paying $250,000 cash and issuing a $50,000 note payable. On January 1, 2018, the balance sheet of Minor Co. was as follows: Minor Company Balance Sheet Assets Liabilities and Owners' Equity Cash $40,000 $55,000 Notes Payable Capital wwww w Acc. Receivable 80,000 120,000 280,000 Inventory $335,000 Buildings(net) Equipment(net) 50,000 30,000 Patents 5,000 Trademarks 10,000 $335,000 An appraisal indicated that the fair market value of the receivables was $75,000, and the fair market value of inventory and buildings were $110,000 and $70,000 respectively. According to the appraisal, the patents were worthless. Required: Prepare the journal entry to be record the purchase by Grand Corp.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
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