$136,000
[Per Part (a)]
÷
=
3.36:1
SOLUTIONS TO ASSIGNMENTS
| Back | Next | Homepage |
EXERCISE 18-1
|
1. 2. 3. 4. |
Financing
activities, (c). Operating
activities, (a). Financing
activities, (c). Investing
activities, (b). |
|
5. 6. 7. |
Noncash
investing and financing activities, (d). Operating
activities, (a). Noncash
investing and financing activities, (d). |
EXERCISE 18-2
Net income....................................................................................... $195,000
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation expense............................................. $35,000
Increase in accounts receivable............................ (15,000 )
Increase in accounts payable................................ 8,000
Decrease in prepaid expenses.............................. 4,000
Loss on sale of equipment..................................... 5,000 37,000
Net cash provided by operating activities......................... $232,000
EXERCISE 18-3
DEPECHE MODE CO.
Partial Statement of Cash Flows
For the Year Ended December 31, 2002
Cash flows from operating activities
Net income................................................................................. $163,000
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation expense..................................... $30,000 )
Increase in accounts receivable.................... (21,000 )
Decrease in inventory..................................... 15,000 )
Decrease in prepaid expenses...................... 5,000 )
Increase in accrued expenses payable....... 10,000 )
Decrease in accounts payable....................... (7,000 ) 32,000
Net cash provided by operating
activities....................................................................... $195,000
EXERCISE 18-4
WESLEY SNIPES CO.
Partial Statement of Cash Flows
For the Year Ended December 31, 2002
Cash flows from operating activities
Net income............................................................................... $ 57,000)
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation expense..................................... $24,000 )
Loss on sale of equipment............................. 4,000 ) 28,000)
Net cash provided by operating
activities............................................................... 85,000)
Cash flows from investing activities
Sale of equipment..................................................... 11,000 *
Purchase of equipment............................................ (70,000 )
Construction of equipment..................................... (53,000 )
Net cash used by investing activities......................... (112,000)
Cash flows from financing activities
Payment of cash dividends.................................................. (14,000)
*Cost of equipment sold.......................................... $45,000 )
*Accumulated depreciation.................................... 30,000 )
*Book value................................................................ 15,000 )
*Loss on sale of equipment.................................... 4,000 )
*Cash proceeds........................................................ $11,000 )
EXERCISE 18-5
(a) EDDIE MURPHY COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2002
Cash flows from operating activities
Net income....................................................................... $125,000 )
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation expense............................. $24,000 )
Increase in accounts receivable............ (9,000 )
Decrease in inventories.......................... 9,000 )
Decrease in accounts payable............... (13,000 ) 11,000 )
Net cash provided by operating
activities...............................................................
136,000 )
Cash flows from investing activities
Sale of land........................................................ 25,000 )
Purchase of equipment.................................... (60,000 )
Net cash used by investing
activities............................................................... (35,000 )
Cash flows from financing activities
Payment of cash dividends............................. (60,000 )
Redemption of bonds....................................... (50,000 )
Issuance of common stock............................ 50,000 )
Net cash used by financing
activities............................................................... (60,000 )
Net increase in cash............................................................... 41,000 )
Cash at beginning of period................................................. 22,000 )
Cash at end of period............................................................ $ 63,000 )
(b) (1) Current cash debt coverage ratio:
|
Net cash provided by operating activities |
÷ |
Average current liabilities |
|
$136,000 [Per Part (a)] |
÷ |
|
= |
3.36:1 |
EXERCISE 18-5 (Continued)
(2) Cash return on sales ratio:
|
Net cash provided by operating activities |
÷ |
Sales |
$136,000 ÷ $978,000 = 13.91%
(3) Cash debt coverage ratio:
|
Net cash provided by operating activities |
÷ |
Average total liabilities |
$136,000 ÷
= .63:1
*$47,000 + $200,000 **$34,000 + $150,000
|
PROBLEM 18-2A |
REBECCA SHERRICK COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2002
Cash flows from operating activities
Cash receipts from customers............................... $6,610,000 (1)
Cash paid
To suppliers.................................... $5,390,000 (2)
For operating expenses............... 1,255,000 (3) 6,645,000
Net cash used by operating
activities.................................................................. $ (35,000 )
Computations:
(1) Cash receipts from customers
Sales $7,100,000
Deduct: Increase in accounts receivable 490,000
Cash receipts from customers $6,610,000
(2) Cash payments to suppliers
Cost of goods sold $5,210,000
Add: Increase in inventories 220,000
Cost of purchases 5,430,000
Deduct: Increase in accounts payable 40,000
Cash payments to suppliers $5,390,000
(3) Cash payments for operating expenses
Operating expenses.............................................. $ 905,000
($380,000 + $525,000)
Add: Increase in prepaid
operating expenses................ $170,000
Decrease in accrued
expenses payable................... 180,000 350,000
Cash payments for operating
expenses............................................................. $1,255,000
|
PROBLEM 18-4A |
DREAMWORKS INTERNATIONAL CO.
Partial Statement of Cash Flows
For the Year Ended December 31, 2002
Cash flows from operating activities
Net income............................................................................... $143,000
Adjustments to reconcile net income
to net cash provided by operating
activities
Increase in accounts receivable.................. $(15,000 )
Decrease in accounts payable..................... (9,000 )
Increase in income taxes payable............... (2,000 (22,000 )
Net cash provided by operating
activities....................................................................... $121,000
|
PROBLEM 18-5A |
(a) JIM CARREY COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2002
Cash flows from operating activities
Net income.................................................................................. $17,000
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation expense................................ $11,000
Increase in accounts receivable............... (6,000 )
Increase in inventory................................... (3,000 )
Decrease in accounts payable.................. (7,000 )
Decrease in income taxes payable.......... (5,000 ) (10,000 )
Net cash provided by operating
activities.................................................................. 7,000
Cash flows from investing activities
Sale of equipment................................................ 10,000
Purchase of equipment....................................... (7,000 )
Net cash provided by investing
activities.................................................................. 3,000
Cash flows from financing activities
Issuance of bonds............................................... 10,000
Payment of cash dividends................................ (9,000 )
Net cash provided by financing
activities.................................................................. 1,000
Net increase in cash.................................................................. 11,000
Cash at beginning of period.................................................... 13,000
Cash at end of period............................................................... $24,000
PROBLEM 18-5A (Continued)
(b)
(1) $7,000 ÷
= .149:1
*$26,000 + $15,000 **$33,000 + $20,000
(2) $7,000 ÷ $240,000 = 2.92%
(3) $7,000 ÷
= .113:1
*$26,000 +
$15,000 + $20,000 **$33,000 + $20,000 + $10,000
PROBLEM 18-7A |
TOM CRUISE COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2002
Cash flows from operating activities
Net income....................................................................................... $132,210
Adjustments to reconcile net income
to net cash provided by operating
activities
Depreciation expense................................... $ 49,700
Gain on sale of plant assets......................... (8,750 )
Increase in accounts receivable................. (33,800 )
Increase in inventories.................................. (19,250 )
Increase in accounts payable..................... 9,420
Decrease in accrued expenses
payable......................................................... (6,730 ) (9,410 )
Net cash provided by operating
activities....................................................................... 122,800
Cash flows from investing activities
Sale of investments............................................... 2,500
Sale of plant assets................................................ 15,550 *
Purchase of plant assets...................................... (92,000 )
Net cash used by investing
activities....................................................................... (73,950 )
Cash flows from financing activities
Sale of common stock........................................... 50,000
Issuance of bonds................................................. 30,000
Payment of cash dividends.................................. (83,400 )
Net cash used by financing
activities....................................................................... (3,400 )
Net increase in cash....................................................................... 45,450
Cash at beginning of period......................................................... 47,250
Cash at end of period.................................................................... $ 92,700
PROBLEM 18-7A (Continued)
*Cash proceeds from sale of plant assets
Cost of asset sold
($205,000 + $92,000 – $250,000)............................................... $47,000
Accumulated depreciation of asset sold
($40,000 + $49,700 – $49,500).................................................... 40,200
Book value of asset sold................................................................ 6,800
Gain on sale of plant assets (from income statement)............. 8,750
Cash proceeds from sale.......................................................
$15,550
