Chapter 6, Problem 29E

Preparing a Statement of Cash Flows from Balance Sheets and Income Statements. BTB Electronics Inc. manufactures parts, components, and processing equipment for electronics and semiconductor applications in the communications, computer, automotive, and appliance industries. Its sales tend to vary with changes in the business cycle because the sales of most of its customers are cyclical. Exhibit 3.32 presents balance sheets for BTB as of December 31, Year 7 through Year 9, and Exhibit 3.33 presents income statements for Year 8 and Year 9. REQUIRED a. Prepare a worksheet for the preparation of a statement of cash flows for BTB Electronics Inc for Years 8 and 9. Follow the format of Exhibit 3.14 in the text. Notes to the firms financial statements reveal the following (amounts in thousands): (1) Depreciation expense was 641 in Year 8 and 625 in Year 9. No fixed assets were sold during these years. (2) Other Assets represents patents. Patent amortization was 25 in Year 8 and 40 in Year 9. BTB sold a patent during Year 9 at no gain or loss. (3) Changes in Deferred Income Taxes are operating activities. b. Discuss the relations among net income and cash flow from operations and the pattern of cash flows from operating, investing, and financing activities.

Using Statementsof Cash Flows John Marshall is employed as a bank loan officer for First State Bank. He is comparing twocompanies that have applied for loans, and he wants your help in evaluating those companies. Thetwo companies—Morris, Inc., and Walker Company—are approximately the same size and hadapproximately the same cash balance at the beginning of 2009. Because the total cash flows for thethree-year period are virtually the same, John is inclined to evaluate the two companies as equal interms of their desirability as loan candidates.Abbreviated information (in thousands of dollars) from Morris, Inc., and Walker Company is as follow:                                               Morris, Inc.                               Walker Company                                             2009 2010 2011                         2009 2010 2011Cash flows from:Operating activities              $10  $13  $15                               $ 8  $3   $(2)Investing activities:…

For the past two years, Monroe Corporation’s statement of cash flows has shown net cash provided by financing activities. Which of the following choices could explain this result?   a.  Collection of accounts receivable balances. b.  Sales of factory equipment. c.  Issuance of long-term debt. d.  Receipt of cash dividends from investments in other company’s stock.

aa As consultants in advisory services at an accounting firm, we are hired by management of Gadberry to advise on cash flow reporting. Management is concerned about the relatively small net increase in cash, and how the company is doing compared to competitors Nessly and Tootsey. The following Tableau Dashboard will assist in our analysis.

You can determine a company’s cash situation by analyzing the cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets. Which of the following is true for the statement of cash flows? It reflects cash generated and used during the reporting period.   It reflects revenues when earned.     Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the following table, identify which type of activity is described by each statement.   Operating Activity Investing Activity Financing Activity A company reports a 10% increase in its accounts payable from the last month.         D and W Co. sells its last season’s inventory to a discount store.         Yum Brands distributes dividends to its…

Preparing the statement of cash flows—direct method The income statement and additional data of Value Corporation follow: a. Collections from customers are $13,000 more than sales. b. Dividend revenue, interest expense, and income tax expense equal their cash amounts. c. Payments to suppliers are the sum of cost of goods sold plus advertising expense. d. Payments to employees are $3,000 more than salaries expense. e. Cash payment for the acquisition of plant assets is $102,000. f. Cash receipts from sale of land total $29,000. g. Cash receipts from issuance of common stock total $38,000. h. Payment of long-term notes payable is $10,000. i. Payment of dividends is $9,000. j Cash balance at June 30, 2017, was $21,000; at June 30, 2018, it was $43,000. Prepare Value Corporations statement of cash flows for the year ended June 30, 2018. Use the direct method.

Current Attempt in Progress Freida's Fashions Limited is an international clothing designer. The most recent statement of cash flows contained the following items. Classify each item as either a cash flow from operating activities, investing activities, or financing activities. 1. Cash received from customers 2. Cash received from issuing common shares 3. Cash paid to purchase equipment 4. Cash received from borrowing money from bank as a long-term loan 5. Cash paid to suppliers and employees Operating Activity Financing Activity Investing Activity Financing Activity Operating Activity V

Can you explain how you got the figure for purchase of equipment (215,000) and also please answer the below multiple choice:   The term cash as used on the statement of cash flows includes all the following EXCEPT: A) cash due from customers within 30 days. B) cash on hand. C) cash equivalents. D) cash in bank   Which of the following statements accurately describes the statement of cash flows? A) It shows the relative proportion of debt and assets. B) It shows the link between accrual-based income and the cash reported on the balance sheet. C) It indicates when long-term debt will mature. D) It shows the link between book income and earnings per share.   Which of the following is NOT a true statement about the statement of cash flows? A) It shows where cash came from and how it was spent. B) It reports why cash increased or decreased. C) It covers a specific span of time the same as the income statement. D) It shows how the profits or losses of the company were generated.…

XYZ Corp. is selling furniture. The comparative balance sheet and income statement are summarized below. You are also given the following additional information:(see detail as attachements) Requirement: Prepare the statement of cash flows using the indirect method for the year ended December 31, current year. Prepare the Cash Flow from Operating Activities (CFO) using the direct method. Based on the cash flow statement, write a short paragraph explaining the major sources and uses of cash by XYZ Corp during the current year.