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ADMS 2500 Lecture 21: Accounting 21

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byzantiumcat166
26 Nov 2020
School
York University
Department
Administrative Studies
Course
ADMS 2500
Professor
Mary M A

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ADMS 2500 Full Course Notes
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ADMS 2500 Full Course Notes
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Document Summary

Statement of comprehensive income: comparative statement of financial position. Select transaction data to identify specific cash flows. Indirect method: coverts accrual based income statement to cash based statement. Indirect method procedures: determine the change in cash that needs to be reconciled by comparing this period"s closing cash balance to the previous period"s closing cash balance as reported on the statement of financial. Reconciling entries are recorded as investing or financing as required: complete scf by calculating subtotals and ensuring that the sum of the change in cash equals the actual change as determined in step 1. Interest paid = interest expense + opening interest payable - ending interest payable. If ending interest payable > opening interest payable, the difference is included in interest expense and must be deducted from interest expense. Dividends paid = dividends declared + opening dividends payable - ending dividends payable.

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Related Questions

16. Mendes Charters reported the following information atDecember 31, 2015:

Preferred stock, $100 par, 500 shares authorized, andoutstanding;

cumulative; nonparticipating; callable at par value $50,000

Common stock, $12 par, 50,000shares authorized and outstanding 600,000

Additional paid-incapital--Common 25,000

Retained earnings825,000

Mendes’ total contributed capitalis

a. $ 650,000 b. $ 675,000 c. $1,500,000 d. $ 625,000

17. Which of the following should be considered when a companydecides to declare a cash dividend on common stock?

a. The retained earnings balance only

b. The amount of authorized shares of common stock

c. The book value of the company's stock

d. The cash available and the retained earnings balance

18. The primary reason for a stock split is to

a. distribute cash to the investor.

b. decrease the market value of the stock.

c. decrease the number of shares outstanding.

d. increase the contributed capital of the corporation.

19. Nordic Exports Inc. reported net income of $150,000 for2015, but its cash balance decreased $40,000. Which financialstatement should Nordic Exports’ management refer to for anexplanation of this situation? a

. Balance Sheet

b. Income Statement

c. Statement of Retained Earnings

d. Statement of Cash Flows

20. The primary purpose of the statement of cash flows is toprovide information about

a. the financial position of the company.

b. the profitability of the company.

c. the investing and financing activities of the company.

d. the cash inflows and outflows of the company.

21. Cash flows from acquiring and disposing of long-term assetsare classified as

a. operating activities.

b. investing activities

. c. financing activities.

d. purchasing activities.

22. Cash flows from borrowing and paying off a 90-day bank loanare classified as

a. operating activities. b. investing activities. c. financingactivities. d. purchasing activities.

23. Cash flows from issuing and repurchasing stock or issuingand repaying (retiring) debt are classified as

a. operating activities. b. investing activities. c. financingactivities. d. borrowing activities.

24. Cash flows from acquiring and selling products areclassified as

a. operating activities. b. investing activities. c. financingactivities. d. distribution activities.

25. Presented below is the operating activities section of thestatement of cash flows for Golden Consulting for 2016:

Operating activities:

Net income $ 92,000

Add: Depreciation 20,000

Decrease in accounts receivable 8,000

__________

$120,000

Deduct: Decrease in accounts payable (6,000)

Net cash inflow from operating activities $114,000

Which method of preparing the operating activities section hasGolden Consulting used?

a. The direct method b. The indirect method c. Either method d.Cannot be determined without further information

A fire destroyed your firm’s ending balance sheet and income statement after the year-end
but before the financial statements are released. However, you have been successful in obtaining the
numbers for the beginning balance sheet and the statement of cash flows, which are provided to you and
your team members in Excel format. Fields representing the missing balance sheet and income statement
are End of year2 in the Excel sheet

CONSOLIDATED BALANCE SHEETS (USD $) End of year 2 End of year 1
In Thousands, unless otherwise specified
Current assets:
Cash and cash equivalents 　 598
Receivables, net 　 230
Inventories, net 　 2309
Other current assets 　 47
Total current assets 　 3184
Property and equipment, net of accumulated depreciation 　 1292
Assets held for sale 　 1
Goodwill 　 76
Intangible assets, net 　 29
Other assets, net 　 32
Assets, Total 　 4614
Current liabilities: 　 0
Current portion of long-term debt 　 0
Accounts payable 　 2030
Accrued expenses 　 380
Other current liabilities 　 150
Total current liabilities 　 2560
Long-term debt 　 604
Other long-term liabilities 　 239
Commitments and Contingencies 　 0
Stockholders Equity Attributable to Parent [Abstract] 　 0
Preferred stock, nonvoting, $00001 par value 　 0
Common stock, voting, $00001 par value 　 0
Additional paid-in capital 　 520
Treasury stock, at cost 　 -27
Accumulated other comprehensive income (loss) 　 3
Retained earnings 　 715
Total stockholders equity 　 1210
Liabilities and Stockholders Equity, Total 　 4613
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) 12 Months Ended
In Thousands, except Per Share data, unless otherwise specified Year 2
Net sales 　
Cost of sales, including purchasing and warehousing costs 　
Gross profit 　
Selling, general and administrative expenses 　
Operating income 　
Interest expense 　
Other income, net 　
Total other, net 　
Income before provision for income taxes 　
Provision for income taxes 　
Net income 　
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) 12 Months Ended
In Thousands, unless otherwise specified Year 2
Cash flows from operating activities:
Net income $392
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 208
Share-based compensation 13
Loss on property and equipment, net 1
Other 2
Provision for deferred income taxes -2
Excess tax benefit from share-based compensation -16
Increase Decrease in Operating Capital
Receivables, net -32
Inventories, net -204
Other assets 11
Accounts payable 113
Accrued expenses 63
Other liabilities -4
Net cash provided by operating activities 545
Cash flows from investing activities:
Purchases of property and equipment -196
Payments to Acquire Businesses, Gross -186
Sale of certain assets of acquired business 19
Proceeds from sales of property and equipment 1
Net cash used in investing activities -362
Cash flows from financing activities:
(Decrease) increase in bank overdrafts -3
Decrease in financed vendor accounts payable 0
Issuance of senior unsecured notes 449
Payment of debt related costs -9
Borrowings under credit facilities 0
Payments on credit facilities 0
Dividends paid -18
Proceeds from the issuance of common stock, primarily exercise of stock options 4
Tax withholdings related to the exercise of stock appreciation rights -22
Excess tax benefit from share-based compensation 16
Repurchase of common stock -81
Contingent payment accrued on acquisitions 5
Other -1
Net cash provided by (used in) financing activities 331
Net increase (decrease) in cash and cash equivalents 514
Cash and cash equivalents, beginning of period 598
Cash and cash equivalents, end of period 1,112
Supplemental cash flow information:
Interest paid 35
Income tax payments 219
Non-cash transactions:
Accrued purchases of property and equipment 21
Retirement of common stock 0
Contingent consideration accrued on acquisitions 0
Changes in other comprehensive income 1
Declared but unpaid cash dividends $4

What are the Balance Sheet Ratios (debt-to-asset and debt-to-equity ratios) for the following financial information for 2015 and 2016? (PLEASE SHOW WORK SO I CAN UNDERSTAND HOW THIS WAS DONE. Thank you)

AMAZON.COM INC (AMZN) CashFlowFlag INCOME STATEMENT
Fiscal year ends in December. USD in millions except per share data. 2015-12 2016-12
Revenue 107006 135987
Cost of revenue 71651 88265
Gross profit 35355 47722
Operating expenses
Sales, General and administrative 20411 27284
Other operating expenses 12711 16252
Total operating expenses 33122 43536
Operating income 2233 4186
Interest Expense 459 484
Other income (expense) -206 190
Income before income taxes 1568 3892
Provision for income taxes 950 1425
Other income -22 -96
Net income from continuing operations 596 2371
Net income 596 2371
Net income available to common shareholders 596 2371
Earnings per share
Basic 1.28 5.01
Diluted 1.25 4.9
Weighted average shares outstanding
Basic 467 474
Diluted 477 484
EBITDA 8308 12492
AMAZON.COM INC (AMZN) CashFlowFlag BALANCE SHEET
Fiscal year ends in December. USD in millions except per share data. 2015-12 2016-12
Assets
Current assets
Cash
Cash and cash equivalents 15890 19334
Short-term investments 3918 6647
Total cash 19808 25981
Receivables 6423 8339
Inventories 10243 11461
Deferred income taxes
Total current assets 36474 45781
Non-current assets
Property, plant and equipment
Land 9770 13998
Fixtures and equipment 18417 25989
Other properties 1866 2454
Property and equipment, at cost 30053 42441
Accumulated Depreciation -8215 -13327
Property, plant and equipment, net 21838 29114
Goodwill 3759 3784
Intangible assets
Deferred income taxes 1084
Other long-term assets 2289 4723
Total non-current assets 28970 37621
Total assets 65444 83402
Liabilities and stockholders' equity
Liabilities
Current liabilities
Accounts payable 20397 25309
Accrued liabilities 10384 13739
Deferred revenues 3118 4768
Total current liabilities 33899 43816
Non-current liabilities
Long-term debt 8235 7694
Capital leases 5948 7519
Deferred taxes liabilities 392
Other long-term liabilities 3978 4696
Total non-current liabilities 18161 20301
Total liabilities 52060 64117
Stockholders' equity
Common stock 5 5
Additional paid-in capital 13394 17186
Retained earnings 2545 4916
Treasury stock -1837 -1837
Accumulated other comprehensive income -723 -985
Total stockholders' equity 13384 19285
Total liabilities and stockholders' equity 65444 83402
AMAZON.COM INC (AMZN) Statement of CASH FLOW
Fiscal year ends in December. USD in millions except per share data. 2015-12 2016-12
Cash Flows From Operating Activities
Net income 596 2371
Depreciation & amortization 6281 8116
Investments losses (gains) 5
Deferred income taxes 81 -246
Stock based compensation 2119 2975
Accounts receivable -1755 -3367
Inventory -2187 -1426
Accounts payable 4294 5030
Accrued liabilities 913 1724
Other working capital 1292 1955
Other non-cash items 281 -689
Net cash provided by operating activities 11920 16443
Cash Flows From Investing Activities
Investments in property, plant, and equipment -4589 -6737
Acquisitions, net -795 -116
Purchases of investments -4091 -7756
Sales/Maturities of investments 3025 4733
Net cash used for investing activities -6450 -9876
Cash Flows From Financing Activities
Long-term debt issued 353 621
Long-term debt repayment -4235 -4361
Excess tax benefit from stock based compensation 119 829
Repurchases of treasury stock
Net cash provided by (used for) financing activities -3763 -2911
Effect of exchange rate changes -374 -212
Net change in cash 1333 3444
Cash at beginning of period 14557 15890
Cash at end of period 15890 19334
Free Cash Flow
Operating cash flow 11920 16443
Capital expenditure -4589 -6737
Free cash flow 7331 9706
Supplemental schedule of cash flow data
Cash paid for income taxes 273 412
Cash paid for interest 478 496