GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
17th Edition
ISBN: 9781260218831
Author: Libby
Publisher: MCG CUSTOM
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Textbook Question
Chapter 6, Problem 6.24E
Interpreting tho Effects of Salos Declines and Changes In Rocoivablos on Cash Flow from Operations
Stride Rite Corporation manufactures and markets shoes under the brand names Stride Rite, Keds, and Sperry Top-Sider. Three recent years produced a combination of declining sales revenue and net income culminating in a net loss of $8,430,000). Each year, however, Stride Rite was able to report positive cash flows from operations. Contributing to that positive cash flow was the change in
| (dollars in thousands) Current Year Previous Year |
||
| Accounts and notes receivable, less allowances | $48,066 | $63,403 |
Required:
- 1. On the current year’s cash flow statement (indirect method), how would the change in accounts receivable affect cash flow from operations? Explain why it would have this effect.
- 2. Explain how declining sales rcsenue often leads to (a) declining accounts receivable and (b) cash collections from customers being higher than sales revenue.
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Interpreting the Effects of Sales Declines and Changes in Receivables on Cash Flow
from Operations
E14-
24
Stride Rite Corporation manufactures and markets shoes under the brand names Stride Rite,
Keds, and Sperry Top-Sider. Three recent years produced a combination of declining sales
revenue and net income culminating in a net loss of $8,430,000. Each year, however, Stride
Rite was able to report positive cash flows from operations. Contributing to that positive cash
flow was the change in accounts receivable. The current and prior year balance sheets
reported the following:
(dollars in thousands)
Current Year
Previous Year
Accounts and notes receivable, less allowances
$48,066
$63,403
Required:
1. On the current year's cash flow statement (indirect method), how would the change
in accounts receivable affect cash flow from operations? Explain why it would have
this effect.
2. Explain how declining sales revenue often leads to (a) declining accounts receivable
and (b) cash collections…
Please give a detailed analysis of the financial statements given below for Joshua & White Technologies. Your analysis should include answers to the questions as follows (not limited to these questions):
Has the company’s liquidity position improved or worsened?
Has the company’s ability to manage its assets improved or worsened?
How has the company’s profitability changed during the last year?
Joshua & White Technologies: December 31 Balance Sheets
(Thousands of Dollars)
Assets
2019
2018
Cash and cash equivalents
$21,000
$20,000
Short-term investments
3,759
3,240
Accounts Receivable
52,500
48,000
Inventories
84,000
56,000
Total current assets
$161,259
$127,240
Net fixed assets
223,097
200,000
Total assets
$384,356
$327,240
Liabilities and equity
Accounts payable
$33,600
$32,000
Accruals
12,600
12,000…
Last year, National Co. reported negative net cash flow and negative free cash flow. However, its cash on the balance sheet increased. Which of the following could explain these changes in its cash position?
a. The company had a sharp increase in its depreciation and amortization expenses.
b. The company had a sharp increase in its inventories.
c. The company issued new common stock.
d. None of the choices
Chapter 6 Solutions
GB 112/212 MANAGERIAL ACC. W/ACCESS >C<
Ch. 6 - Prob. 1QCh. 6 - What is gross profit or gross margin on sales? In...Ch. 6 - What is a credit card discount? How does it affect...Ch. 6 - Prob. 4QCh. 6 - Prob. 5QCh. 6 - Differentiate accounts receivable from notes...Ch. 6 - Which basic accounting principle is the allowance...Ch. 6 - Using the allowance method, is bad debt expense...Ch. 6 - Prob. 9QCh. 6 - Prob. 10Q
Ch. 6 - Prob. 11QCh. 6 - Prob. 12QCh. 6 - Prob. 13QCh. 6 - Prob. 14QCh. 6 - Briefly explain how the total amount of cash...Ch. 6 - Prob. 16QCh. 6 - Sales discounts with terms 2/10, n/30 mean: a. 10...Ch. 6 - Gross sales total 300,000, one-half of which were...Ch. 6 - A company has been successful in reducing the...Ch. 6 - When a company using the allowance method writes...Ch. 6 - You have determined that Company X estimates bad...Ch. 6 - Prob. 6MCQCh. 6 - Which of the following is not a step toward...Ch. 6 - When using the allowance method, as bad debt...Ch. 6 - Which of the following best describes the proper...Ch. 6 - Prob. 10MCQCh. 6 - Prob. 6.1MECh. 6 - Prob. 6.2MECh. 6 - Recording Bad Debts Prepare journal entries for...Ch. 6 - Prob. 6.4MECh. 6 - Determining the Effects of Credit Policy Changes...Ch. 6 - Prob. 6.6MECh. 6 - Prob. 6.7MECh. 6 - Prob. 6.1ECh. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Reporting Net Sales with Credit Sales, Sales...Ch. 6 - Determining the Effects of Credit Sales, Sales...Ch. 6 - Prob. 6.5ECh. 6 - Reporting Bad Debt Expense and Accounts Receivable...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Recording Bad Debt Expense Estimates and...Ch. 6 - Prob. 6.9ECh. 6 - Prob. 6.10ECh. 6 - Computing Bad Debt Expense Using Aging Analysis...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Recording and Reporting a Bad Debt Estimate Using...Ch. 6 - Prob. 6.14ECh. 6 - Prob. 6.15ECh. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Inferring Bad Debt Write-Offs and Cash Collections...Ch. 6 - Prob. 6.18ECh. 6 - Prob. 6.19ECh. 6 - Prob. 6.20ECh. 6 - Recording, Reporting, and Evaluating a Bad Debt...Ch. 6 - Prob. 6.22ECh. 6 - Prob. 6.23ECh. 6 - Interpreting tho Effects of Salos Declines and...Ch. 6 - Prob. 6.25ECh. 6 - Prob. 6.26ECh. 6 - Prob. 6.27ECh. 6 - Prob. 6.1PCh. 6 - Recording Bad Debts and Interpreting Disclosure of...Ch. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Preparing an Income Statement and Computing the...Ch. 6 - Prob. 6.5PCh. 6 - Prob. 6.6PCh. 6 - Prob. 6.7PCh. 6 - Reporting Net Sales and Expenses with Discounts,...Ch. 6 - Prob. 6.2APCh. 6 - Determining Bad Debt Expense Based on Aging...Ch. 6 - Prob. 6.4APCh. 6 - Prob. 6.5APCh. 6 - Prob. 6.1CONCh. 6 - Finding Financial Information Refer to the...Ch. 6 - Finding Financial Information Refer to the...Ch. 6 - Prob. 6.3CPCh. 6 - Prob. 6.4CPCh. 6 - Prob. 6.5CP
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