Operating Cash Flow

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Operating Cash Flow Questions and Answers

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Hinck Corporation reported net cash provided by operating activities of $361,200, net cash used by investing activities of $148,900 (including cash spent for capital assets of $203,600), and net ca...
The following are facts about the activities of Ziegler Company. Net Income was $79,660. Amortization of Premium on Bonds Payable, $9,950. Bonds Payable increased by $45,000 during the year. Prepa...
Alpha's Company's Fiscal Year 2017 Statement of Cash Flows reflected information that cash provided by operating activities was $800,000. The following additional information was provided: Deprecia...
Describe the one adjustment necessary to reconcile net income to cash provided by operations that was not initially a part of the statement of cash flows until you made some changes in the reports...
Consider a three-year project with the following information: initial fixed asset investment=$870,000 straight-line depreciation to zero over the five-year life zero salvage value price=$34.05 vari...
The Can - Do Co. is analyzing a proposed project with anticipated sales of 12,000 units, give or take 4%. The expected variable cost per unit is $7 and the expected fixed cost is $36,000. The cost...
The financial staff of Carin Communications has identified the following information for the first year of the roll out of its new proposed service What is the project's operating cash flow for the...
What is EBIT here? Also, calculate Times interest earned for 1993 with the data provided. 1993 Cash 136 Accounts receivable, net 2,447 Inventory 2,916 Current Assets 5,499 Land 567 Buildings,...
You are considering two machines. A and B that can be used for the same purpose. Machine A costs $250,000, will reduce costs by $75,000 per year needs working capital of $20,000 at time zero which...
In comparing accounting net income and operating cash flow, name two items you typically find in net income that are not in operating cash flow. Explain what each is and why it is excluded in opera...
Fresno Furniture Manufacturing Inc. currently earns annual revenues of $350,000 and incurs total operating expenses (excluding depreciation and interest expense) of 45.00% of revenues. Its earnings...
McGilla Golf has decided to sell a new line of golf clubs. The clubs will sell for 777 per set and have a variable cost of 384 per set. The company has spent 199,456 for a marketing study that dete...
Calculate cash flow from operating activities using the following information: Cash sales: $10,000 Credit sales: $15,000 Cash received from prior credit sales: $8,000 Rent paid: $3,000 Inventory pu...
If a company's accounts receivable increased by $23,000 during the year, will the $23,000 appear as a positive or negative amount on the statement of cash flows?
Moby Dick Corporation has sales of $4,925,290; income tax of $419,532; the selling, general and admin expenses of $262,313; depreciation of $341,168; cost of goods sold $2,686,020; and interest exp...
Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? a. Depreciation expense. b. A loss on the sale of equip...
Why is the statement of cash flows important?
Eisenhower Communications is trying to estimate the first-year net operating cash flow (at Year 1) for a proposed project. The financial staff has collected the following information on the project...
A project has an annual operating cash flow of $43,700. Initially this 4 year project required 3,800 in net working capital which is recoverable when the project ends. The firm also spent 21,500 on...
Nixon Communications is trying to estimate the first-year operating cash flow (at t = 1) for a proposed project. The financial staff has collected the following information: Projected sales = $10...
Megan Corporation net income last year was $120,000. Changes in the company's balance sheet accounts for the year appear below. The company paid a cash dividend of $75,600 and it did not dispose o...
The 2008 balance sheet of Maria's Tennis Shop, Inc., showed $2.6 million in long-term debt, $710,000 in the common stock account, and $6.15 million in the additional paid-in surplus account. The 20...
Hogan Company had the following account balances for 2016: Hogan reported net income of $300,000 for 2016. Assuming no other changes in current account balances, what is the amount of net cash pro...
Tantan income statement revealed sales of $700,000; gross profit of $300,000; selling and administrative costs of $140,000; and income taxes of $45,000. The selling and administrative expenses incl...
Company had the following information regarding their accounts. Increase in accounts receivable of $10,200; decrease in supplies of $3,100; gains on sale of equipment of $7,400; losses on sales of...
The following information is related to Towson Company's fiscal year 2018. Income Statement: Net Income $2,000,000 Depreciation Expense 300,000 Loss on Sale of Plant Assets 65,000 Interest Expense...
Last year Apple charged $3,528,000 Depreciation on the Income Statement of Andrews. If early this year, Apple purchased a new depreciable asset, the effect on Andrews's financial statements would b...
The following are facts about the activities of Lester Company. Accumulated Depreciation was $41,840 at the beginning of the year was $26,930 at the end of the year. Equipment that had cost $30,140...
The following are facts about the activities of Howard Company. Cash Flows from Operating Activities was $44,410. Net Income was $40,390. Cash Flows from Financing Activities was $18,360. Cash was...
Precise Machinery is analyzing a proposed project. The company expects to sell 2,100 units, give or take 5 percent. The expected variable cost per unit is $260 and the expected fixed costs are $589...
Assume that Microsoft has a total market value of $300 billion and a marginal tax rate of 35%. If it permanently changes its leverage from no debt by taking on new debt in the amount of 13% of its...
Which of the following are correct methods for computing the operating cash flow of a project assuming that the interest expense is equal to zero? I. EBIT + Depreciation - Taxes II. EBIT - Depre...
Daphne is considering an investment in Crew Cut, Inc. and want to evaluate the firm's free cash flow. From the income statement, you see that Crew Cut earned an EBIT of $23.09 million, paid taxes o...
Jefferson & Sons are evaluating a project that will increase annual sales by $70,000 and annual costs by $40,000. The project will initially require $145,000 in fixed assets that will be depreciate...
You need to borrow $10,000 and the following alternatives are available: a) Pay $2983 at the end of each year for 5 years, starting at the end of the first year (5 payments total) b) Pay $237.90...
The following income statement and information about changes in noncash current assets and current liabilities are reported. SONAD COMPANY Income Statement For Year Ended December 31, 2017 S...
When projecting the statement of cash flows, the following represent operating cash outflows: A. Decrease in accounts payable. B. Increase in wages payable. C. Increase in property, plant and eq...
The third (final) step in preparing the statement of cash flows is to do what?
A firm is considering renewing its equipment to meet increased demand for its product. The cost of equipment modifications is $1.9 million plus $100,000 in installation costs. The firm will depreci...
Kee Corporation intends to purchase equipment for $1,000,000. The equipment has a 5 year useful life and will be depreciated on a straight-line basis to a salvage value of $250,000. The marginal ta...
At an output level of 55,000 units, you calculate that the degree of operating leverage is 3.25. If output rises to 64,000 units, what will the percentage change in operating cash flow be? Will the...
A company bought $50,000 of inventory, for $20,000 cash, with the balance due to supplier in 30 days. What is the operating cash flow, in this transaction?
A property is sold for $5,100,000 with selling costs of 3% of the sales price. The mortgage balance at the time of sale is $3,600,000. The property was purchased 5 years ago for $4,820,000. Annual...
Eastwood Enterprises offers horseback riding lessons. During the month of June, the company provides lessons on account, totaling $4,100. By the end of the month, the company received, on account,...
Suppose a company's operating cash flow has been negative for several years running. is this necessarily a good or bad sign?
During the year, Hepworth Company earned a net income of $52,466. Beginning and ending balances for the year for selected accounts are as follows: There were no financing or investing activities f...
During the month of May, Henderson Company had the following transactions: Revenues of $52,000 were earned and received in cash. Bank loans of $3,000 were paid off. Equipment of $12,000 was purchas...
Oriole Company reported net income of $62000 for the year. During the year, accounts receivable decreased by $7600, accounts payable increased by $4000 and depreciation expense of $5100 was recorde...
Kingbird Beverage Company reported the following items in the most recent year. Net income $40,300 Dividends paid 6,520 Increase in accounts receivable 10,330 Increase in accounts payable 7,270 Pu...
The cash flows from operations ratio is a type of: a) Investment ratio b) Efficiency ratio c) Gearing ratio d) Profitability ratio e) Liquidity ratio
Describe the three key cash-related activities of a firm.
Given the following statement of comprehensive income data, calculate operating cash flow: net sales=$16,500 cost of goods sold=$10,350 operating expenses=$3,118 depreciation=$800 interest expense=...
From the Statement of Cash Flows, suggest some ways a company can improve their cash flow.
Hernandez Company sold equipment for $50,000 cash. The equipment had originally cost $70,000 and had accumulated depreciation of $30,000. Show how this transaction would be presented in the stateme...
Marjorie is preparing the Statement of Cash Flows for her company. Based on the following information, what would be the Cash Provided by Operating Activities using the Indirect Method? Net Income...
While preparing the financial statements for Standards Corp., Ash Roe decided that the creation of a direct-method cas flow statement in addition to a reconciliation of net income to cash flow was...
Marigold Corp., had net income for 2018 of $53,60,000. Additional information is as follows: Amortization of patents $44,400 Depreciation on plant assets 16,58,000 Long-term debt: Bond premium am...
Ocean Pines Company had net income $450,000. They also had depreciation expense of $150,000, an increase or (decrease) in accounts receivable of $-50,000, and an increase or (decrease) in inventory...
Omni Corporation's accumulated depreciation equipment account increased by $3,800, while $2,500 of patent amortization was recognized between balance sheet dates. There were no purchases or sales o...
The section showing cash flow from operations, using the indirect method, for Company reported an increase in inventories during the year of $1,753 million and no change in accounts payable for inv...
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