Exercise 13.10
|
Abbreviated Statement of Cash Flows in $ |
|
| Cash from operating activities | 136000 |
| Cash from investing activities | (56,000) |
| Cash from financing activities | (34,000) |
| Net increase at the end of the year | 46,000 |
| Cash balance in the beginning of the year | 10,800 |
| Net cash at the end of the year | $56,800 |
Exercise 13.12
Made payment on account payables to office suppliers. This operating activity.
Paid the principal amount of a mortgage to Seventh Bank. This is a financing activity.
Paid interest charges relating to a mortgage to Seventh Bank. This is an operating activity.
Issued preferred stock for cash; management plans to use this cash in the near future to purchase another company. This is a financing activity.
Delegate your assignment to our experts and they will do the rest.
Paid salaries to employees in the finance department. This is an operating activity.
Collected an account receivable from a customer. This is an operating activity.
Transferred cash from the general bank account into a money market fund. This is an investing activity.
Used the cash received in 4, above to purchase Moran Manufacturing Company. This is an investing activity
Made a year-end adjusting entry to recognize amortization expense. This one should not be included in either of the three activities since it is a non-cash activity.
At year-end, purchased for cash an advertising spot on a local radio station for the next eight months. This is an investment activity.
Paid the annual dividend on preferred stock. This should not be included in the any of the three activities since it is a non-cash investing activity.
Paid the semiannual interest on bonds payable. This should not be included in the any of the three activities since it is a non-cash investing activity
Received a semiannual dividend from an investment in the common stock of another corporation. This is an operating activity
Sold for cash an investment in the common stock of another corporation. This is an investing activity.
Received cash upon the maturity of an investment in cash equivalent. This is a financial activity ( Liang, et al., 2016) .
Exercise 13-2A
(a)
|
Investing activity of Cash Flows in $ |
|
| Sales of marketable securities | 42,000 |
| Sales of plant assets | 33,000 |
| Net | $75,000 |
(b)
|
Non Cash Investing and Financing Activities in $ |
|
| Market securities account | |
| Debt entries | 210,000 |
| Credit entries | (162,000) |
| Purchase of NEW equipment using long-term note payable | (136,000) |
| Net | ($88,000) |
(c)
To raise the similar amount of money for next year’s investment, Headrick’s management can move money from financial activity, investing activity operational activity, or all of them, and invest it ( Avkiran, 2011) .
Exercise 13.4A
(a)
|
Operating activity of Cash Flows in $ |
|
| Cash received from customers | 2,850,000 |
| Interest and deviant received | 104,000 +70,000 =174,000 |
| Cash paid to suppliers and employees | 1,550,000 |
| Interest paid | (185,000) |
| Income tax paid | (90,000) |
| Net | 4,299,000 |
(b)
To increase the cash flow from the operating activities, Treece’s management can one, discourage credit sales. That is, it should ask customers to pay for the products before delivery. Secondly, Treece’s management should move from labor-intensive production methods to capital intensive. That is because the letter is more efficient and less costly than the former ( Delen et al., 2013) .
References
Avkiran, N. K. (2011). Association of DEA super-efficiency estimates with financial ratios: Investigating the case for Chinese banks. Omega , 39 (3), 323-334.
Delen, D., Kuzey, C., & Uyar, A. (2013). Measuring firm performance using financial ratios: A decision tree approach. Expert Systems with Applications , 40 (10), 3970-3983.
Liang, D., Lu, C. C., Tsai, C. F., & Shih, G. A. (2016). Financial ratios and corporate governance indicators in bankruptcy prediction: A comprehensive study. European Journal of Operational Research , 252 (2), 561-572.
