FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Transcribed Image Text:The company reported for the current year 20X1 the following income statement:
Sales
Cost of goods
Gross margin
Income Statement
Selling expenses
General & administrative expenses
Net income before taxes
Income Taxes
Net Income after Taxes
202,500
(105,000)
97,500
(20,000)
(27,700)
49,800
(9,000)
40,800
Additional Information:
The amounts of selling expenses and general & administrative expenses incorporate
expenses related to wages of about €26,000, other expenses paid in cash of about
€14,200 and depreciation expenses.
Prepare the cash flow statement for "Beta" Company using the indirect method
Prepare the cash flow statement for "Beta" Company using the direct method
Analyse the cash flow statement for "Beta" Company.
Transcribed Image Text:A comparative balance sheet for "BETA" Company containing data in € for the most
recent years is as follows:
Assets
Fixed assets:
Property, plant and
equipment
Less accumulated
depreciation
Net property, plant and
equipment
Long-term investments
Total fixed assets
Current assets:
Cash and cash equivalents
Accounts receivables
Inventories
Prepayment accounts
Total current assets
Total assets
20X1
160,000
(45,000)
115,000
21,500
136,500
51,000
67,500
40,000
8,000
166,500
303,000
Comparative Balance Sheet
Liabilities &
20X0
Stockholders' Equity
Stockholders' equity:
135,000 Common stock
(37,500) Retained earnings
97,500 Total
equity
15,000 Long-term liabilities:
112,500
Long-term notes payable
Total
long-term
liabilities
Current liabilities:
8,000
142,500
stockholders'
43,500
42,000 Accounts payable
Wages payable
49,000
Taxes payable
Short-term debt
Total current liabilities
Total liabilities
255,000 Total liabilities &
stockholders' equity
20X1
129,900
55,800
185,700
57,000
57,000
22,000
3,300
3,000
32,000
60,300
117,300
303,000
20X0
105,900
37,500
143,400
54,000
54,000
17,000
2,100
15,000
23,500
57,600
111,600
255,000
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- Which of the following items are included in calculating Firm Free Cash Flow? I. Cost of goods sold II. Depreciation expense III. Interest expense IV. Capital expenditures A. I and II. B. I, II and IV. C. II, III and IV. D. I and III.arrow_forwardUsing the direct method of preparing the statement of cash flows, to determine the cash effects of operating activities, which of the following needs to be adjusted? a. Equity as reported in the balance sheet b. Long-term assets and liabilities from the balance sheet c. Net income d. Reported revenues and expensesarrow_forwardHow do I find what the net increase or decrease is in cash on a Statement of Cash Flow?arrow_forward
- Prepare a statement of cash flows using the indirect methodarrow_forwardWhich of the following is not a purpose of cash flows statement. Select one: O a. They predict net income. O b. They help evaluate management decisions. c. The predict ability to pay debts or dividends. O d. They predict future flows.arrow_forwardAccounting Questionarrow_forward
- A measure that helps estimate the amount and timing of cash flows from operating activities is the cash flow on total assets ratio. True or False True Falsearrow_forwardUse ulate the cash flow from operating activities using the indirect method. AA. Statement of Cash Flows (Indirect Method) Use the following information regarding the Surpa Corporation to (a) prepare a statement of cash flows using the indirect method and (b) compute Surpa's operating-cash-flow -to-current-liabilities ratio. Accounts payable increase. . Accounts receivable increase. . . Accrued liabilities decrease . .. Amortization expense. . Cash balance, January 1.. . Cash balance, December 31.. Cash paid as dividends ... Cash paid to purchase land . .. Cash paid to retire bonds payable at par. . Cash received from issuance of common stock... Cash received from sale of equipment . .. Depreciation expense. .. Gain on sale of equipment . . .. Inventory decrease. . . Net income. . .. am . . . $ 13,000 .. 4,000 6,000 7,000 21,000 17,000 31,000 90,000 60,000 40,000 17,000 29,000 7,000 13,000 78,000 3,000 140,000 Prepaid expenses increase ... Average current liabilities. .. A. Cash Flow…arrow_forwardPlease explain how to prepare a statement of cash flows (indirect method) including analyzing tables? Please provide an example. Thank you,arrow_forward
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