Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
11th Edition
ISBN: 9780077861759
Author: Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher: McGraw-Hill Education
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Textbook Question
Chapter 2, Problem 11QP
Cash Flows Ritter Corporation’s accountants prepared the following financial statements for year-end 2015:
- a. Explain the change in cash during 2015.
- b. Determine the change in net working capital in 2015.
- c. Determine the cash flow generated by the firm’s assets during 2015.
| RITTER CORPORATION Income Statement 2015 |
|
| Revenue | $785 |
| Expenses | 575 |
| 90 | |
| Net income | $120 |
| Dividends | $95 |
| RITTER CORPORATION December 31 |
||
| 2015 | 2014 | |
| Assets | ||
| Cash | $80 | $60 |
| Other current assets | 185 | 170 |
| Net fixed assets | 405 | 385 |
| Total assets | $670 | $615 |
| Liabilities and Equity | ||
| Accounts payable | $140 | $125 |
| Long-term debt | 160 | 150 |
| Stockholders’ equity | 370 | 340 |
| Total liabilities and equity | $670 | $615 |
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Comprehensive: Balance Sheet from Statement of Cash Flows
Mills Company prepared the following balance sheet at the beginning of 2016:
Balance SheetJanuary 1, 2016
Assets
Liabilities and Shareholders' Equity
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$ 74,200
Total Liabilities and Shareholders' Equity
$74,200
At the end of 2016, Mills prepared the following statement of cash flows:
Statement of Cash FlowsFor Year Ended December 31, 2016
Operating Activities:
Net income
$ 5,400
Adjustments for differences between income flowsand cash flows from operating activities:
Add: Depreciation expense
1,900
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The following is the comparative balance sheet of Manish Ltd. Prepare
a Cash Flow Statement for the year ended 31 December, 2016 from
the details given below:
Liabilities
Assets
31st Dec., 31st Dec.,
2015
31st Dec., 31st Dec.,
2015
2016
2016
Share Capital
Reserves & Surplus 730,000 755,000
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Current Liabilities
Fixed assets 760,000 792,500
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740,000 740,000
720,000 30,000
715,000 26,000
740,000 735,000
20,000 734,000
Receivable
Dividend Provision
78,000
マ1,05,000 1,59,000
Cash
72,500
725,000
そ1,05,000 マ1,59,000
The Income statement for Manish Ltd. for the year ended 31
December 2015 shows the following
information:
Amount(*)
1,45,000
99,000
12,500
8,000
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Cost of Sales
Tax provisions
Dividend provided
RITTER CORPORATION
Income Statement
Revenue
Expenses
Depreciation
Net income
Dividends
2019
Assets
Cash
Other current assets
Net fixed assets
Total assets
Liabilities and Equity
Accounts payable
Long-term debt
Stockholders' equity
C.
RITTER CORPORATION
Balance Sheets
December 31
Total liabilities and
equity
$780
580
93
$ 107
$ 87
2018
$ 58
168
373
$599
$ 118
143
338
$599
a.
Change in cash
b. Change in net working capital
Cash flow from assets
2019
$ 71
176
393
$640
$ 131
151
358
a. What is the change in cash during 2019?
b. Determine the change in net working capital in 2019.
c. Determine the cash flow generated by the firm's assets during 2019.
$640
$
$
13
8
Chapter 2 Solutions
Corporate Finance (The Mcgraw-hill/Irwin Series in Finance, Insurance, and Real Estate)
Ch. 2 - Prob. 1CQCh. 2 - Prob. 2CQCh. 2 - Prob. 3CQCh. 2 - Prob. 4CQCh. 2 - Prob. 5CQCh. 2 - Cash Flow from Assets Why is it not necessarily...Ch. 2 - Operating Cash flow Why is it not necessarily bad...Ch. 2 - Net Working Capital and Capital Spending Could a...Ch. 2 - Cash Flow to Stockholders and Creditors Could a...Ch. 2 - Prob. 10CQ
Ch. 2 - Building a Balance Sheet Sankey, Inc., has current...Ch. 2 - Building an Income Statement Shellon, Inc., has...Ch. 2 - Market Values and Book Values Klingon Cruisers,...Ch. 2 - Prob. 4QPCh. 2 - Calculating OCF Barrell, Inc., has sales of...Ch. 2 - Calculating Net Capital Spending Gordon Driving...Ch. 2 - Building a Balance Sheet The following table...Ch. 2 - Cash Flow to Creditors The 2014 balance sheet of...Ch. 2 - Cash. Flow to Stockholders The 2014 balance sheet...Ch. 2 - Prob. 10QPCh. 2 - Cash Flows Ritter Corporations accountants...Ch. 2 - Financial Cash flows The Stancil Corporation...Ch. 2 - Building an Income Statement During the year, the...Ch. 2 - Calculating total Cash Flows Schwert Corp. shows...Ch. 2 - Using Income Statements Given the .following...Ch. 2 - Prob. 16QPCh. 2 - Marginal versus Average Tax Rates (Refer to Table...Ch. 2 - Prob. 18QPCh. 2 - Accounting Values versus Cash Flows In Problem 18,...Ch. 2 - Calculating Cash Flows Cusic Industries had the...Ch. 2 - Prob. 21QPCh. 2 - Use the following information for Ingersoll, Inc.,...Ch. 2 - Prob. 23QPCh. 2 - Prob. 24QPCh. 2 - Net Fixed Assets and Depreciation On the balance...Ch. 2 - Prob. 26QPCh. 2 - Prob. 1MCCh. 2 - Prob. 2MCCh. 2 - Prob. 3MC
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