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Cash Flow Statements: Michelson Ltd and Hooker Corporation

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Cash Flow Statements
Practice Questions

Question 1

Complete the Statement of Cash Flows. Show workings.
Mickelson Ltd manufactures golf clubs for professional golfers. Mickelson Ltd's balance sheets for the years ended 30 June 2010 and 2011.

Question 2)

Hooker Corporation collapsed in July 1989, owing hundreds of millions of dollars to various creditors. This occurred in the era before a Cash Flow Statement was required in Australia, although a Funds Statement was required, which provided different sort of information about the movement of funds. It appears that creditors and the market took different views of the company's success.

Read the article "Hooker Corporation: a case for cashflow reporting?" by Jack Flanagan and Greg Whittred (ARTICLE IS ATTACHED).

Required:
(a) Outline the indicators of financial performance that may have contributed to the company's reputation and state whether its reputation was deserved, according to the article.
(b) Do you think that if Hooker Corporation had been required to prepare a Cash Flow Statement, that its failure might have been avoided? You may find the ICC format (Issues, content, conclusions) useful in structuring your answer.

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Solution Summary

The following problem helps complete cash flow statements.

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