Concept explainers
Research Case 21–3
Information from cash flow activities; FedEx
• LO21–3 through LO21–8
Real World Financials
Locate the 2015 financial statements and related disclosure notes of FedEx Corporation. You can locate the report online at www.fedex.com.
Required:
1. From the information provided in the statement of
2. Describe the activities listed under financing activities for the most recent fiscal year. [Hint: FedEx’s Statement of Changes in Common Stockholders’ Investment (statement of shareholders’ equity) will help you determine the nature of the stock activity.] What is the most notable financing activity reported?
3. What are the cash payments FedEx made for interest and for income taxes in the three years reported? (Hint: See the disclosure notes.)
4. Obtain the relevant authoritative literature on disclosure of interest and income taxes using the FASB Accounting Standards Codification. You might gain access at the FASB website (www.fasb.org). What is the specific citation that specifies the way FedEx reports interest and income taxes separately that enabled you to answer requirement 3?
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INTERMEDIATE ACCOUNTING(LL)-W/2 ACCESS
- Exercise 21-27 (Algo) Statement of cash flows; direct method [LO21-3, 21-5, 21-6, 21-8] Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below: RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) 2024 2023 Assets Cash $ 26 $ 114 Accounts receivable 203 134 Prepaid insurance 11 6 Inventory 289 177 Buildings and equipment 384 352 Less: Accumulated depreciation (121) (242) $ 792 $ 541 Liabilities Accounts payable $ 90 $ 104 Accrued liabilities 10 15 Notes payable 52 0 Bonds payable 161 0 Shareholders’ Equity Common stock 402 402 Retained earnings 77 20 $ 792 $ 541 RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 ($ in millions) Revenues Sales revenue $ 2,010 Expenses Cost of goods sold $ 1,439 Depreciation expense 41…arrow_forwardProblem 21-4 (Static) Statement of cash flows; direct method [LO21-3, 21-8] The comparative balance sheets for 2024 and 2023 and the statement of income for 2024 are given below for Dux Company. Additional information from Dux's accounting records is provided also.arrow_forwardProblem 11-2A Classify items and prepare the statement of cash flows (LO11-1, 11-3, 11-4, 11-5) Seth Erkenbeck, a recent college graduate, has just completed the basic format to be used in preparing the statement of cash flows (indirect method) for ATM Software Developers. All amounts are in thousands (000s). ATM SOFTWARE DEVELOPERS Statement of Cash Flows For the year ended December 31, 2021 Cash Flows from Operating Activities Net income $ Adjustments to reconcile net income to net cash flows from operating activities: Net cash flows from operating activities Cash Flows from Investing Activities Net cash flows from investing activities Cash Flows from Financing Activities Net cash flows from financing activities Net increase (decrease) in cash $ 2,805 Cash at the beginning of the period 7,180 Cash at the end of the period $ 9,985 Listed below in random order are line items to be included in…arrow_forward
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- Exercise 16-21B (Algo) Direct: Preparing statement of cash flows and supporting note LO P5 Cash and cash equivalents, December 31 prior year-end Cash and cash equivalents, December 31 current year-end Cash received as interest Cash paid for salaries Bonds payable retired by Issuing common stock (no gain or loss on retirement) Cash paid to retire long-term notes payable Cash received from sale of equipment Land purchased by issuing long-term notes payable Cash paid for store equipment Cash dividends paid Cash paid for other expenses Cash received from customers Cash paid for inventory $ 10,000 28,120 1,000 29,000 115,000 50,000 24, 500 66, 700 9,500 6,000 16,000 194,000 100,880 Use the above information about Ferron Company to prepare a complete statement of cash flows (direct method) for the current year ended December 31. Use a note disclosure for any noncash investing and financing activities. (Amounts to be deducted should be indicated with o minus sign.) FERRON COMPANY Statement of…arrow_forwardProblem 21-4 (Algo) Statement of cash flows; direct method [LO21-3, 21-8] The comparative balance sheets for 2021 and 2020 and the statement of income for 2021 are given below for Dux Company. Additional information from Dux's accounting records is provided also. DUX COMPANYComparative Balance SheetsDecember 31, 2021 and 2020($ in thousands) 2021 2020 Assets Cash $ 49 $ 24 Accounts receivable 46 53 Less: Allowance for uncollectible accounts (3 ) (2 ) Dividends receivable 3 2 Inventory 65 60 Long-term investment 21 18 Land 85 60 Buildings and equipment 273 290 Less: Accumulated depreciation (70 ) (90 ) $ 469 $ 415 Liabilities Accounts payable $ 35 $ 43 Salaries payable 3 7 Interest payable 7 2 Income tax payable 8 9 Notes payable 25 0 Bonds payable…arrow_forwardLO 1 C Exercise 12-2A Use the indirect method to determine cash flows from operating activities Mendez Incorporated presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from the company's 2012 and 2011 year-end balance sheets. Account Title Accounts receivable Accounts payable 2012 $15,200 8,800 2011 $16,500 9,200 The 2012 income statement showed net income of $27,200. Required a. Prepare the operating activities section of the statement of cash flows. b. Explain why the change in the balance in accounts receivable was added to or subtracted from the amount of net income when you completed Requirement a. c. Explain why the change in the balance in accounts payable was added to or subtracted from the amount of net income when you completed Requirement a.arrow_forward
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning