Answer To: Pease I need it on word file Complete the following textbook problems: E13-5 E13-7 E13-17 P13-1...
David answered on Dec 20 2021
Solution E13-5:
Comparison of Statement of Cash Flows direct and indirect reporting
Cash flows
Statement of Cash Flows Method
(and related changes)
Direct
Indirect
1.
Accounts payable increase or decrease
X
2.
Payments to employees
X
3.
Cash collections from customers
X
4.
Accounts receivable increase or decrease
X
5.
Payments to suppliers
X
6.
Inventory increase or decrease
X
7.
Wages payable, increase or decrease
X
8.
Depreciation expense
X
9.
Net income
X
10.
Cash flows from operating activities
X
X
11.
Cash flows from investing activities
X
X
12.
Cash flows from financing activities
X
X
13.
Net increase or decrease in cash during the period
X
X
Solution E13-7
1)
Cash flows from operating activities—indirect method
Net loss
($4,900
)
Depreciation expense
7,000
Amortization of copyrights
200
Accounts receivable decrease ($8,000 – $15,000)
7,000
Salaries payable increase ($15,000 – $1,000)
14,000
Other accrued liabilities decrease ($1,000 – $5,100)
(4,100
)
Net cash provided by operating activities
$19,200
2) The net loss is because of the non-cash expense i.e. depreciation. Depreciation expense with decrease in working capital causes the net loss to change into positive operating cash flow from operations. To know the difference between cash flow and net income is important because it helps the financial analyst in determining that whether trends represent one-time events.
Solution E13-17
1)
The investing and financing sections of the statement of cash flows for Gibraltar Industries:
Cash flows from investing activities:
Acquisitions (investments in other companies)
(8,724)
Proceeds from sale of other equity investments
34,701
Purchases of property, plant and equipment
(21,595)
Net proceeds from sale of property and equipment
2,692
Net cash used in investing activities
7,074
Cash flows from financing activities:
Long-term debt reduction
(185,567)
Proceeds from long-term debt
53,439
Net proceeds from issuance of common stock
250
Payment of dividends
(5,985)
Net cash provided by (used in) financing activities
(137,863)
2)
Capital acquisitions ratio
=
Cash flow from operations
=
$107,874
=
5.00
Cash Paid for Plant & Equipment
$21,595
Since this ratio is more than 1, it indicates...