Question

Questions for SE 12-1, 12-2, and 12-3

Chcept-work to distinguish the income Deline the revenue recognition principle and the matching V a in how these two principles work to make the income statement a better Can's periodic financial performance than the statement of cash flows. CIL. IWO Basic concept. (WD regarding a firm's HORT EXERCISES wwing information regarding the Melville Corporation to answer Short Exercises 12-1 Ise the following through 12-3: dividends ............. counts payable increase. counts receivable increase sued liabilities decrease .. Amortization expense.. Cash balance, January 1 Gish balance, December 31 cash paid as dividends .... Cish paid to purchase land.. cich paid to retire bonds payable at par chreceived from issuance of common stock rash received from sale of equipment. Depreciation expense... Gain on sale of equipment... Inventory decrease.. Net income............... Prepaid expenses increase. $12,000 4,000 5,000 7,000 22.000 23,000 31,000 90,000 60,000 37,000 19,000 29,000 4,000 13.000 80,000 2,000 SE12-1. Cash Flow from Operating Activities Using the information for the Melville Corporation above, calculate the cash flow from operating activities. SEIZ-2. Cash Flow from Investing Activities Using the information for the Melville Corporation above, calculate the cash flow from investing activities. SET2-3. Cash Flow from Financing Activities Using the information for the Melville Corporation above, calculate the cash flow from financing activities. The following information for Evans & Sons relates to Short Exercises 12-4 through 12-63 $1,600,000 Cash flow from operating activities..... 850,000 Capital expenditures. ..... 300,000 Current liabilities, beginning of year ...... 380,000 Current liabilities, end of year. .... S812-4. Free Cash Fee Cash Flow Using the above data, calculate the free cash flow for Evans & Sons SK12-5. Operating "perating-Cash-Flow-to-Current-Liabilities Ratio Using the above data, calculate the operating cash-flow-to-current-liabilities ratio for Evans & Sons.

Answer 1

1)
Statement of Cash flows
For the Year ended December 31
Cash flow from operating activities:
Net Income		$ 80,000
Add (Subtract) items to convert net income to cash basis:
Depreciation		$     29,000
Amortization		$       7,000
Gain on sale of Equipment		$     -4,000
Accounts payable Increase		$ 12,000
Inventory Decreases		$     13,000
Prepaid Expenses Increase		$     -2,000
Accounts receivables Increase		$ -4000
Accrued Liabilities decrease		$     -5,000
Cash flow provided by operating activities		$ 126,000
Cash flow from Investing Activities
Cash paid to purchase land		$   -90,000
Cash received from sale of equipment		$     19,000
Cash flow used in Investing activities		$   -71,000
Cash flow from financing activities
Cash paid as dividend		$   -31,000
Cash paid to retire bonds		$   -60,000
cash received from issuance of common stock		$     37,000
Cash flow used in financing activities		$   -54,000
Net increase in Cash		$ 1,000
Cash at beginning of Year		$     22,000
Cash at end of Year		$ 23,000