Prepare the statement of cash flows for the year 2019 using direct method.

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Answer 1

Question

Chapter 16, Problem 20E

1.

To determine

Prepare the statement of cash flows for the year 2019 using direct method.

2.

To determine

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

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Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's expenses, Gross margin, and Net income?

Recently, Abercrombie & Fitch has been implementing a turnaround strategy since its sales had been falling for the past few years (11% decrease in 2014, 8% in 2015, and just 3% in 2016.) One part of Abercrombie's new strategy has been to abandon its logo-adorned merchandise, replacing it with a subtler look. Abercrombie wrote down $20.6 million of inventory, including logo-adorned merchandise, during the year ending January 30, 2016. Some of this inventory dated back to late 2013. The write-down was net of the amount it would be able to recover selling the inventory at a discount. The write-down is significant; Abercrombie's reported net income after this write-down was $35.6 million. Interestingly, Abercrombie excluded the inventory write-down from its non-GAAP income measures presented to investors; GAAP earnings were also included in the same report. Question: What impact would the write-down of inventory have had on Abercrombie's assets, Liabilities, and Equity?

Answer 2

Question

Chapter 16, Problem 20E

1.

To determine

Prepare the statement of cash flows for the year 2019 using direct method.

2.

To determine

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

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Answer 3

Question

Chapter 16, Problem 20E

1.

To determine

Prepare the statement of cash flows for the year 2019 using direct method.

2.

To determine

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 16, Problem 20E

1.

To determine

Prepare the statement of cash flows for the year 2019 using direct method.

2.

To determine

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

Expert Solution & Answer

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Answer 5

Chapter 16, Problem 20E

1.

To determine

Prepare the statement of cash flows for the year 2019 using direct method.

2.

To determine

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

Answer 6

Chapter 16, Problem 20E

1.

To determine

Prepare the statement of cash flows for the year 2019 using direct method.

Answer 7

Chapter 16, Problem 20E

1.

To determine

Prepare the statement of cash flows for the year 2019 using direct method.

Answer 8

2.

To determine

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

Answer 9

2.

To determine

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 16 - A company uses the indirect method to determine...Ch. 16 - Prob. 2MCQ Ch. 16 - Prob. 3MCQ Ch. 16 - Prob. 4MCQ Ch. 16 - The following information is available for a...Ch. 16 - Prob. 1DQ Ch. 16 - Prob. 2DQ Ch. 16 - Prob. 3DQ Ch. 16 - Prob. 4DQ Ch. 16 - When a statement of cash flows is prepared using...

Prepare the statement of cash flows for the year 2019 using direct method.

Solution Summary: The author explains how to prepare the statement of cash flows for the year 2019 using the direct method.

Prepare the statement of cash flows for the year 2019 using direct method.

Determine the following:

(a) Section shows the largest cash inflow and outflow.

(b) The largest individual item among the investing cash outflows.

(c) The cash proceeds larger from issuing notes or issuing stock.

(d) Explain the company has a net cash inflow or outflow from borrowing activities.

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Chapter 16 Solutions

Prepare the statement of cash flows for the year 2019 using direct method.

Solution Summary: The author explains how to prepare the statement of cash flows for the year 2019 using the direct method.

Prepare the statement of cash flows for the year 2019 using direct method.

Determine the following: (a) Section shows the largest cash inflow and outflow. (b) The largest individual item among the investing cash outflows. (c) The cash proceeds larger from issuing notes or issuing stock. (d) Explain the company has a net cash inflow or outflow from borrowing activities.

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Chapter 16 Solutions