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# Statement of Cash Flows

### Statement of Cash Flows - Direct and Indirect Methods

Is there a difference between direct and indirect methods to make a statement of cash flows? Discuss and note two or three specific differences. In addition, clearly - Distinguish between cash flows from operating activities and cash flows from investing activities. - Compare the statement of cash flows with income statement

### Calculate the expected annual cash flow income tax considerations.

To open a new store, Ross Tire Company plans to invest \$640,000 in equipment expected to have a four-year useful life and no salvage value. Ross expects the new store to generate annual cash revenues of \$840,000 and to incur annual cash operating expenses of \$520,000. Ross' average income tax rate is 30 percent. The company uses

### Cash Flows From Investing Activites

From the balance sheet info for 2011 and 2012 I calculated the following: Change in Equipment from 2011 to 2012: decrease of \$35,000 Change in Accumulated Depreciation from 2011 to 2012: decrease of \$5,000 Depreciation expense of \$15,000 was reported on the 2012 income statement. Equipment with an original cost of \$35,000

### Preparing a cash flows statement

Internal Service Fund, Statement of Cash Flows. Prepare a statement of cash flows for the internal service fund for the city from the following information: Cash on hand at the beginning of the year \$160 Interest on investments

### Fairchild Company: Statement of cash flows, both direct and indirect

Prepare a statement of cash flows using the direct & the indirect method for Fairchild Company. Financial data for Fairchild Co for 2009 & 2010 are attached. Condensed financial data of Fairchild Company for 2010 and 2009 are presented below. FAIRCHILD COMPANY Comparative Balance Sheet as of December 31 2010 and 2009

### What is free cash flow and what is its importance to a business?

Explain free cash flow and its importance to a business.

### Future Cash Flows.

Users are looking for firms who can generate more future cash flows. which one may mostly decrease earnings quality when the users examine the earnings figures as the indicator of future cash flows? A Accruals B Unrealized holding gain or loss C R&D expense D credit sales

### Free Cash Flows Problem

Now FASB required that all employee stock options should be expensed on income statement. On Jan. 2005, AA company granted total \$100,000 (fair value) of stock options to the employee. The exercise price is equal to the market price at the grant time. The employees cannot exercise the options until 2007. According to the new req

### Cash Disbursements - Statement of Cash Flows

Gary Township's water and sewer fund transferred funds to subsidize the ongoing operations of the Townships' General fund. What category would Gary use to classify cash disbursements for the purpose of its water and sewer enterprise fund statement of cash flows? a) Operating Activities b) Non-Capital Financing Activities c

### Willingham Corporation Indirect Cash Flow Statement 2011

Willingham Corporation's comparative balance sheets are presented below. WILLINGHAM CORPORATION Comparative Balance Sheets December 31 2011

### Future Cash Flows: Initial investment, operating flows, end

A firm believes it can generate an additional \$250,000 per year in revenues for the next 5 years if it replaces existing equipment with new equipment that costs \$210,000. The firm expects to be able to sell the new equipment when it is finished using it (after 5 years). The existing equipment has a book value of \$20,000 and a ma

### Reporting the Statement of Cash Flows

Rapture Company's 2011 income statement and selected balance sheet data at December 31, 2010 and 2011, follow (\$ thousands). RAPTURE COMPANY Income Statement For Year Ended December 31, 2011 Sales revenue \$58,600 Expenses Cost of goods sold 21,000 Depreciation expense 6,000 Salaries expense 11,000 Rent expense 2,500

### Starbuckes Price to Cash Flow Ratio and Cash Flow

Calculate Starbuckes P/CF (Price to Cash Flow Ratio) and cash flow for 2009, 2010, 2011.

### For what reasons would a firm use a financial model in projecting future cash flows from an investment, and what are the primary factors to consider when making the cash flow estimates?

For what reasons would a firm use a financial model in projecting future cash flows from an investment, and what are the primary factors to consider when making the cash flow estimates? Book: Corporate Finance: The Core, 2nd ed.

### p14-25a Johnson, Inc. statement of cash flows indirect method

Accountants for Johnson, Inc., have assembled the following data for the year ended December 31, 2012: December 31, 2012 2011 Current Accounts Current Assets: Cash & cash equivalents \$92,100.00 \$17,000.00 Accounts receivable \$64,500.00 \$69,200.00 Inventories \$87,000.00 \$80,000.00

### Match the following activites with the correct area in the statement of cash flows in which they would appear (indirect format)

Please match the following activites with the correct area in the statement of cash flows in which they would appear (indirect format). Answer ______Paid \$36,250 for a new delivery van. ______Declared and paid a cash dividend to common shareholders. ______Issued check #14556 to buy \$87,650 worth of inventory. ______Accounts

### statement of cash flows

Why are companies required to prepare a statement of cash flows? Why is the statement of cash flows divided into three sections? What does each section tell you about a company's operations? What are the differences between the direct and indirect presentation of cash flows? Why does the Financial Accounting Standards Board all

### government accounting statement of cash flows

Although proprietary fund accounting is similar to business accounting, there are considerable differences in standards pertaining to the statement of cash flows. What are the main differences? When answering this question, please use a few examples of when you have had to create a statement of cash flows and the type of busines

### Determine the appropriate cash flow statement treatment / classification (e.g., operating, investing, financing) and timing, if applicable

Go Orange, Inc. Go Orange, Incorporated ("Company") designs, manufactures, and sells a broad range of mobile network products and systems and communication devices, including mobile, cordless and corded telephones. The Company's primary sources of liquidity are internally generated cash flows, the Company's debt and revolving

### Project's terminal cash flow

PDF Corp needs to replace an old lathe with a new, more efficient model. The old lathe was purchased for \$50,000 nine years ago and has current book value of \$5,000. (The old machine is being depreciated on a straight-line basis over a ten-year useful life.) The new lathe costs \$100,000. It will cost the company \$10,000 to get t

### Effects of Transactions on Statement of Cash Flows

Indicate for each of the following what should be disclosed on a statement of a cash flows (indirect method).If not disclosed , write "not shown". There may be more than one answer for some items. For an item that is added to net income , write "ADD", and for an item that is detucted from net income, write "deduct". show financi

### Why is cash flow considered the most honest statement? restart the growth cycle? categories of ratios?

Why is cash flow considered the most honest statement? Tell in your own words how a cash flow statement is created? Using Accounts Payable as an example, show how this account going up or down from year to year can affect cash flow. DQ 2 Set 1 - If you were looking at an existing small business to acquire, once you received

### Proposed chemical plant: gross income, depreciation, taxable income, taxes paid, BT Cash flow and AT Cash flow

A Proposed chemical plant will cost \$100,000,000, which will be depreciated by MACRS rules over 5-years. Each year the plant will produce 100,000,000 lbs of product. The fixed costs of running the plant are \$20,000,000/year. The variable cost for the product (Raw material + energy) is \$0.50c/lb. The product sells \$ 1.10 lb The

### Hitchcock's Operating Cash Flow

Create and submit an income statement and a balance sheet for Hitchcock Productions. Then, answer the questions that follow. Assume a 30% tax rate for Hitchcock. Cash...512 Depreciation...85 Cost of Goods Sold...128 Accounts Receivable...700 Sales...689 Interest Paid on Bonds...86 Long-term Debt...

### Cash Flow Statements

Ron Nord and Lisa Smith are examining the following statement of cash flows for Carpino Company for the year ended January 31, 2007. Ron claims that Carpino's statement of cash flows is an excellent portrayal of a superb first year with cash increasing \$105,000. Lisa replies that it was not a superb first year. Rather, she sa

### Direct and Indirect Methods; Statement of Cash Flows

When considering the direct and indirect method, I believe that the direct method would be the preferred method. The reason is because of the consistency in the data when using this method. Additionally, the FASB also prefers the direct method over the indirect method. What do you believe is the motivation for the two differen

### Conducting Cash Flow Analysis

Joe's Clambake Company is considering the purchase of a C130 airplane to help spot monster clams on the bottom of Chesapeake Bay. In estimating the worth of adding the plane to the company the following cash flow analysis has been developed: Cash inflow at the end of year 1: \$10,000 Cash inflow at the end of year 2: \$10,00

### Direct and Indirect Methods of Cash Flows

What did you find to be the most challenging part of the problem? Explain why. The income statement for Kosinski Manufacturing Company contains the following condensed information. KOSINSKI MANUFACTURING COMPANY Income Statement For the Year Ended December 31, 2007 Revenues

### Cash flow statement

Statement of cash flows (indirect method).The net changes in the balance sheet accounts of Keating Corporation for the year 2011 are shown below. Account Debit Cash \$ 82,000 Short-term investments \$121,000 Cr Accounts receivable 83,200 Dr Allowance for doubtful accounts 13,300 Cr Inventory 74,200Dr

### P16-8 Barkley Company P23-6 MARCUS INC. Basic and Diluted EPS and SCF Indirect Method, and Net Cash Flow from Operating Activities, Direct Method

P16-8 (Computation of Basic and Diluted EPS) The information below pertains to Barkley Company for 2010. Net income for the year \$1,200,000 8% convertible bonds issued at par (\$1,000 per bond). Each bond is convertible into 30 shares of common stock. 2,000,000 6% convertible, cumulative preferred stock, \$100