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
Explain free cash flow and its importance to a business.
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
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
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's comparative balance sheets are presented below. WILLINGHAM CORPORATION Comparative Balance Sheets December 31 2011
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
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.
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
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
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
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
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
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
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
In this graded discussion, we will be examining the process of evaluating the financial performance and health of a company with the use of problems and exercises from your textbook. The goal is to cover all of the requirements to ensure an opportunity for your successful completion of Course Project 2. Let's start with gaini
Melvin Company's income statement for the year ended December 31, 2012, contained the following condensed information. Revenue from fees $830,220 Operating expenses (excl. depreciation) $625,300 Depreciation expense 62,250 Loss on sale of equipment
Walter Inc. recorded the following events last year: Issuance of shares of the company's own common stock $150,000 Purchase of long-term investment $60,000 Dividends paid to company's own shareholders $27,000 Cash paid to suppliers for inventory purchases
Horizontal Flow, Inward-Outward Flow, Vertical Information flow, and Downward Information Flow of financial data in the Kuali system Please carefully explain (in general) the kinds of data involved, who's doing what to them, and what effects they have, with reference to the appropriate financial and other information. You
Gain on Sale of Equipment 8,000 Purchase of Will Bonds ($300,000 face value) 275,000 Proceeds from Sale of Machinery 300,000 Dividends Paid 50,000 Proceeds from sale of treasury stock 200,000 What is the amount reported as net cash provided from investing activities? $25,000 $50,000 $275,000 $575,000 What is the amount reported as net cash provided by financing activities? $25,000 $30,000 $150,000 $160,000 The gain on sale of equipment should be: a source of funds in the financing activities section. added back to net income to arrive at cash flow from operations. excluded from the statement of cash flows. subtracted from net income to arrive at cash flow from operations.
Gain on Sale of Equipment 8,000 Purchase of Will Bonds ($300,000 face value) 275,000 Proceeds from Sale of Machinery 300,000 Dividends Paid 50,000 Proceeds from sale of treasury stock 200,000 What is the amount reported as net cash provided from investing activities? $25,000 $50,000 $275,000 $575,000 What is
Can you think of any instances in which a company would not need cash? What particular items on the cash flow statement would indicate extreme risk to an investor? Do you think the importance of each section of the cash flow statement depends on what stage a company is in its lifecycle? For example, would one section be more important to a start up while another section would be more important to a cash cow? Why or why not?
Can you think of any instances in which a company would not need cash? What particular items on the cash flow statement would indicate extreme risk to an investor? Do you think the importance of each section of the cash flow statement depends on what stage a company is in its lifecycle? For example, would one section be more im
Decide whether each is an operating, financing or investing activity or a non cash transaction. Tell whether the effect on cash flow is an increase or decrease? 1. Increased accounts payable. 2. Decreased inventory. 3. Increased prepaid insurance. 4. Earned a net income. 5. Declared and paid a cash dividend
The comparative balance sheets for Lopez Ceramics, Inc., for December 31, 2010 and 2009, are as shown below: During 2010, the company had net income of $48,000 and building and equipment depreciation expenses of $40,000 and $30,000, respectively. It amortized intangible assets in the amount of $10,000; purchased investments f
A new project will generate sales of $74.5 million, costs of $42.5 million, and depreciation expense of $10.5 million in the coming year. The firm's tax rate is 30%. a. Calculate cash flow for the year by using all three methods: (a) adjusted accounting profits; (b) cash inflow/cash outflow analysis; and (c) the depreciation
Compare cash flow statements that a nongovernmentally owned hospital prepares versus the cash flow statements a governmentally owned hospital prepares.