ACCT.PRINCIPLES-WILEYPLUS NEXTGEN
14th Edition
ISBN: 9781119709954
Author: Weygandt
Publisher: WILEY
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Chapter 17, Problem 3DIE
a.
To determine
Introduction: The cash flow statement is a financial statement that is prepared by the company to check the net decrease or increase in the cash balance during the year. The cash flow statement records the
To calculate: The free cash flows for O corporation.
b.
To determine
Introduction: The cash flow statement is a financial statement that is prepared by the company to check the net decrease or increase in the cash balance during the year. The cash flow statement records the cash outflows and cash inflows during the year.
To explain: The reason why free cash flow provides better information than net cash provided by operating activities.
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Required:(a) Prepare Vanguard low Statement for the year ended 31 December 2019 with the following classifications using the direct method:
(i) Cash flows from operations;(ii) Cash flows from investing activities;(iii) Cash flows from financing activities.
(b) Discuss the importance of analysing the cash flow statement.
(c) Explain why it is possible to have a negative cash flow from operations but a positive net income. Give an example of such a scenario.
1.
Your answer is partially correct.
Novak Corporation is preparing its 2020 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2020 statement of cash flows.
Code Letter
Effect
A
Added to net income in the operating section
D
Deducted from net income in the operating section
R-I
Cash receipt in investing section
P-I
Cash payment in investing section
R-F
Cash receipt in financing section
P-F
Cash payment in financing section
N
Noncash investing and financing activity
(a)
Purchase of land and building.
select a code letter
(b)
Decrease in accounts receivable.
select a code letter
(c)
Issuance of stock.
select a code letter…
a.calculate free cash flow
trading company "MARS". Provide an interpretation of the cash flow calculation results.
b. Based on the answer in point a, give a recommendation to the trading company "MARS"
how should they use the cash flow.
Chapter 17 Solutions
ACCT.PRINCIPLES-WILEYPLUS NEXTGEN
Ch. 17 - Prob. 1QCh. 17 - Prob. 2QCh. 17 - Prob. 3QCh. 17 - Prob. 4QCh. 17 - Prob. 5QCh. 17 - Prob. 6QCh. 17 - 7. Why is it necessary to use comparative balance...Ch. 17 - 8. Contrast the advantages and disadvantages of...Ch. 17 - Prob. 9QCh. 17 - Prob. 10Q
Ch. 17 - Prob. 11QCh. 17 - Prob. 12QCh. 17 - Prob. 13QCh. 17 - Prob. 14QCh. 17 - Prob. 15QCh. 17 - Prob. 16QCh. 17 - Prob. 17QCh. 17 - Prob. 18QCh. 17 - Prob. 19QCh. 17 - Prob. 20QCh. 17 - Prob. 21QCh. 17 - Prob. 22QCh. 17 - Prob. 1BECh. 17 - Prob. 2BECh. 17 - Prob. 3BECh. 17 - Prob. 4BECh. 17 - Prob. 5BECh. 17 - Prob. 6BECh. 17 - Prob. 7BECh. 17 - Prob. 8BECh. 17 - BE17-9 Hinck Corporation reported net cash...Ch. 17 - BE17-10 Suppose in a recent quarter, Alliance...Ch. 17 - BE17-11 The management of Morrow Inc. is trying to...Ch. 17 - BE17-12 Suppose Columbia Sportswear Company had...Ch. 17 - Prob. 13BECh. 17 - Prob. 14BECh. 17 - Prob. 1DIECh. 17 - Prob. 2aDIECh. 17 - Prob. 2bDIECh. 17 - Prob. 3DIECh. 17 - Prob. 1ECh. 17 - E17-2 An analysis of comparative balance sheets,...Ch. 17 - Prob. 3ECh. 17 - Prob. 4ECh. 17 - Prob. 5ECh. 17 - Prob. 6ECh. 17 - Prob. 7ECh. 17 - Prob. 8ECh. 17 - Prob. 9ECh. 17 - Prob. 10ECh. 17 - Prob. 11ECh. 17 - E17-11 Suppose a recent income statement for...Ch. 17 - Prob. 13ECh. 17 - Prob. 14ECh. 17 - Prob. 1PSACh. 17 - Prob. 2PSACh. 17 - Prob. 3PSACh. 17 - Prob. 4PSACh. 17 - Prob. 5PSACh. 17 - Prob. 6PSACh. 17 - Prob. 7PSACh. 17 - P17-8A Data for Nosker Company are presented in...Ch. 17 - Prob. 9PSACh. 17 - Prob. 10PSACh. 17 - Prob. 11PSACh. 17 - Prob. 17CCCh. 17 - Prob. 2EYCTCh. 17 - Prob. 3EYCTCh. 17 - Prob. 4EYCTCh. 17 - Prob. 5EYCTCh. 17 - Prob. 7EYCTCh. 17 - Prob. 1ISTQCh. 17 - Prob. 2ISTQCh. 17 - Prob. 3ISTQCh. 17 - Prob. 4ISTQCh. 17 - Prob. 5ISTQCh. 17 - Prob. 1IFRECh. 17 - Prob. 2IFRECh. 17 - Prob. 3IFRP
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Similar questions
- Below are several transactions for Meyers Corporation for 2021.Required: 1. For each transaction, determine the amount of cash flows (indicate inflows with a “+” and outflows with a “−”). If cash is involved in the transaction, indicate whether Meyers should classify it as operating, investing, or financing in a statement of cash flows. Enter N/A if the question is not applicable to the statement. 2. Calculate net cash flows for the year. 3. Assuming the balance of cash on January 1, 2021, equals $5,400, calculate the balance of cash on December 31, 2021.arrow_forwardThe cash flow statement shows how much money is generated by an entity's operating activities, which are its main objects..." (A. Thomas and A.M. Ward, 2019 pp576) You must explain why net cash from operations differs from net profit, as well as the impact that working capital management has on cash flow. Develop your response by delving more into the wide variety of challenges and factors involved in managing one type of working capital, such as inventory, trade receivables, or trade payables. Asaparrow_forwardIn its 2021 statement of cash flows, how much should be reported as net cash provided (used) by operating activities?( IF cash INFLOW, leave the numerical figure as positive, if cash OUTFLOW, put a negative sign (-) before the numerical figure)arrow_forward
- 2. Reconstruct the company's comparative balance sheet for 2020/2021 using the information provided and compute and show the missing figures to include the appropriate sign as a positive or negative figure. 3. Prepare a complete statement of cash flows for 2021 using the indirect method.arrow_forward1. should the terminal cashflow be used to calculate the net present value of a company? Give reasons for your answer. 2. Calculate the net present value (NPV) with the information in the attached table.arrow_forward2. Reconstruct the company’s comparative balance sheet for 2020/2021 using the information given and compute and show the missing figures to include the appropriate sign as a positive or negative figure. 3. Prepare a complete statement of cash flows for 2021 using the indirect method using the information givenarrow_forward
- The comparative balance sheets of Buffalo Corporation at the beginning and end of the year 2020 appear below. Assets Cash Accounts receivable Equipment BUFFALO CORPORATION BALANCE SHEETS Dec. 31, 2020 Less: Accumulated Depreciation-Equipment Total Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total $21,140 107,140 40,140 (17,000) $151,420 $21,140 101,140 29,140 $151,420 Jan. 1, 2020 $14,610 89,610 23,610 (11,000 ) $116,830 $16,610 81,610 18,610 $116,830 Inc./Dec. $6,530 Inc. 17,530 Inc. 16,530 Inc. 6,000 Inc. 4,530 Inc. 19,530 Inc. 10,530 Inc. Net income of $45,140 was reported, and dividends of $34,610 were paid in 2020. New equipment was purchased and none was sold.arrow_forward2. Reconstruct the company's comparative balance sheet for 2020/2021 using the information provided and compute and show the missing figures to include the appropriate sign as positive or negative figure. 3. Prepare a complete statement of cash flows for 2021 using the indirect method using the information provided.arrow_forwardIn which direction (positive or negative) would you normally expect each of the following cash flow categories to be? Explain your answer. (short answers) Cash flows from operating activities. Cash flows from investing activities. Cash flows from financing activities.arrow_forward
- (b) Calculate the following for 2019: i. Operating Cash Flow ii. Net Capital Spending iii. Change in Net Working Capital iv. Cash Flow from Assets v. Cash Flow to Creditors vi. Cash Flow to Stockholders ONLY PARTS iv, v, vi to be done please.arrow_forward1. Novak Corporation is preparing its 2020 statement of cash flows, using the indirect method. Presented below is a list of items that may affect the statement. Using the code below, indicate how each item will affect Novak’s 2020 statement of cash flows. Code Letter Effect A Added to net income in the operating section D Deducted from net income in the operating section R-I Cash receipt in investing section P-I Cash payment in investing section R-F Cash receipt in financing section P-F Cash payment in financing section N Noncash investing and financing activity (a) Purchase of land and building. select a code letter (b) Decrease in accounts receivable. select a code letter (c) Issuance of stock. select a code letter…arrow_forwardA. In the long run it is more important for a business to have positive cash flows from itsoperating activities, investing activities or financing activities? Why?B. Identify three factors that may cause net income to differ from net cash flows from operatingactivities.C. Describe how the Statement of Cash Flows helps investors and creditors perform each ofthe following functions: predict future cash flows; evaluate management decisions; predictthe ability to make debt payments to lenders and pay dividends to stockholders.D. Name and explain the three (3) categories of cash-flow activities.arrow_forward
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