INTERMEDIATE ACCOUNTING
3rd Edition
ISBN: 9780136946694
Author: GORDON
Publisher: RENT PEARS
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Textbook Question
Chapter 22, Problem 22.3MC
Big Dollars Corporation's comparative financial statements included the following amounts for the current year:
| Net income | $650,000 |
| $ 93,000 | |
| Equity in earnings of unconsolidated affiliate | $ 61,000 |
| Gain on sale of fixed assets | $ 4,000 |
| Increase in accounts receivable | $ 25,000 |
| Decrease in inventory | $ (57,000) |
| Decrease in fixed assets | $ 38,000 |
| Increase m accounts payable | $ 42,000 |
| Decrease in notes payable | $ (75,000) |
On its current year statement of cash flows what is Big Dollars net cash provided by operating activities?
- a. $677,000
- b. $714,000
- c. $752,000
- d. $790,000
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Here are simplified financial statements for Watervan Corporation:
INCOME STATEMENT
(Figures in $ millions)
Net sales
$ 887.00
Cost of goods sold
747.00
Depreciation
37.00
Earnings before interest and taxes (EBIT)
$ 103.00
Interest expense
18.00
Income before tax
$ 85.00
Taxes
17.85
Net income
$ 67.15
BALANCE SHEET
(Figures in $ millions)
End of Year
Start of Year
Assets
Current assets
$ 375
$ 324
Long-term assets
270
228
Total assets
$ 645
$ 552
Liabilities and shareholders’ equity
Current liabilities
$ 200
$ 163
Long-term debt
114
127
Shareholders’ equity
331
262
Total liabilities and shareholders’ equity
$ 645
$ 552
The company’s cost of capital is 8.5%.
Required:
What is the company’s return on capital? (Use start-of-year rather than average capital.)
Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. P.S- Answer is not 26.48%
Here are simplified financial statements for Watervan Corporation:
INCOME STATEMENT
(Figures in $ millions)
Net sales
$ 887.00
Cost of goods sold
747.00
Depreciation
37.00
Earnings before interest and taxes (EBIT)
$ 103.00
Interest expense
18.00
Income before tax
$ 85.00
Taxes
17.85
Net income
$ 67.15
BALANCE SHEET
(Figures in $ millions)
End of Year
Start of Year
Assets
Current assets
$ 375
$ 324
Long-term assets
270
228
Total assets
$ 645
$ 552
Liabilities and shareholders’ equity
Current liabilities
$ 200
$ 163
Long-term debt
114
127
Shareholders’ equity
331
262
Total liabilities and shareholders’ equity
$ 645
$ 552
The company’s cost of capital is 8.5%.
Required:
Calculate Watervan’s economic value added (EVA).
Note: Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.
What is the company’s return on capital? (Use start-of-year rather than average capital.)
Note: Do not…
Pritchett Co. reported the following year-end data:
Cash $20,200
Short-term investments $ 8,600
Accounts receivable (current) $11,800
Inventory $28,600
Other current assets $12,000
Total current liabilities $29,000
Compute the (a) current ratio
Chapter 22 Solutions
INTERMEDIATE ACCOUNTING
Ch. 22 - Prob. 22.1QCh. 22 - Prob. 22.2QCh. 22 - Prob. 22.3QCh. 22 - Prob. 22.4QCh. 22 - Prob. 22.5QCh. 22 - How do firms reclassify gains and losses on the...Ch. 22 - Prob. 22.7QCh. 22 - Prob. 22.8QCh. 22 - Prob. 22.9QCh. 22 - Prob. 22.10Q
Ch. 22 - Prob. 22.11QCh. 22 - What approach is used in preparing the operating...Ch. 22 - Under the indirect method, do firms subtract bond...Ch. 22 - Do firms subtract pension expense from net income...Ch. 22 - Prob. 22.15QCh. 22 - Prob. 22.16QCh. 22 - Prob. 22.1MCCh. 22 - Prob. 22.2MCCh. 22 - Big Dollars Corporation's comparative financial...Ch. 22 - Prob. 22.4MCCh. 22 - Prob. 22.5MCCh. 22 - Sykes Corporation's comparative balance sheets at...Ch. 22 - Prob. 22.7MCCh. 22 - Prob. 22.8MCCh. 22 - Prob. 22.1BECh. 22 - Prob. 22.2BECh. 22 - Prob. 22.3BECh. 22 - Prob. 22.4BECh. 22 - Prob. 22.5BECh. 22 - Prob. 22.6BECh. 22 - Prob. 22.7BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.9BECh. 22 - Prob. 22.10BECh. 22 - Prob. 22.11BECh. 22 - Prob. 22.12BECh. 22 - Prob. 22.13BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.15BECh. 22 - Prob. 22.16BECh. 22 - Prob. 22.17BECh. 22 - Prob. 22.18BECh. 22 - Prob. 22.19BECh. 22 - Prob. 22.20BECh. 22 - Prob. 22.21BECh. 22 - Prob. 22.22BECh. 22 - Complex Transactions, Acquisitions and...Ch. 22 - Prob. 22.24BECh. 22 - Prob. 22.25BECh. 22 - Complex Transactions, Change in Accounts...Ch. 22 - Prob. 22.27BECh. 22 - Prob. 22.28BECh. 22 - Prob. 22.1ECh. 22 - Prob. 22.2ECh. 22 - Prob. 22.3ECh. 22 - Prob. 22.4ECh. 22 - Prob. 22.5ECh. 22 - Prob. 22.6ECh. 22 - Prob. 22.7ECh. 22 - Prob. 22.8ECh. 22 - Prob. 22.9ECh. 22 - Prob. 22.10ECh. 22 - Statement of Cash Flows, Indirect Method....Ch. 22 - Prob. 22.12ECh. 22 - Prob. 22.13ECh. 22 - Prob. 22.14ECh. 22 - Prob. 22.15ECh. 22 - Prob. 22.16ECh. 22 - Prepare Statement of Cash Flows, Direct Method....Ch. 22 - Prob. 22.2PCh. 22 - Prob. 22.3PCh. 22 - Prob. 22.4PCh. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Prob. 22.11PCh. 22 - Prob. 22.12PCh. 22 - Prob. 22.13PCh. 22 - Statement of Cash Flows, Direct Method, Complex...Ch. 22 - Prob. 1JCCh. 22 - Prob. 1FSCCh. 22 - Prob. 1SSCCh. 22 - Surfing the Standards Case 2: Cash Flow per Share...Ch. 22 - Basis for Conclusions Cases Basis for Conclusions...Ch. 22 - Basis for Conclusions Case 2: Indirect versus...
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