ACTG 2300 Lecture 17: Day 17 Notes
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Use the cash-flow below to make a Summary AnalysisStatement of Cash Flows.
Example: http://imgur.com/a/8r4lSâ
2015 | 2014 | 2013 | |
Cashflows from operating activities: | |||
Netincome | $ 2,409 | $ 2,088 | $ 2,061 |
Adjustments to reconcile net income to net cash provided byoperating activities: | $ - | $ - | $ - |
Depreciation and amortization (including amounts in discontinuedoperations) | $ 1,127 | $ 1,029 | $ 946 |
Stock-based compensation | $ 394 | $ 327 | $ 285 |
Excesstax benefits on stock-based awards | $ (86) | $ (84) | $ (61) |
Othernon-cash operating activities, net | $ (5) | $ (63) | $ 7 |
Deferred income taxes | $ (101) | $ (63) | $ 7 |
Changes in operating assets and liabilities: | |||
Increase in merchandise inventories | $ (890) | $ (563) | $ (898) |
Increase in accounts payable | $ 880 | $ 529 | $ 718 |
Otheroperating assets and liabilities, net | $ 557 | $ 699 | $ 386 |
Netcash provided by operating activities | $ 4,285 | $ 3,984 | $ 3,437 |
Cashflows from investing activities: | |||
Purchases of short-term investments | $ (1,501) | $ (2,503) | $ (2,572) |
Maturities and sales of short-term investments | $ 1,434 | $ 2,406 | $ 2,385 |
Additions to property and equipment | $ (2,393) | $ (1,993) | $ (2,083) |
Otherinvesting activities, net | $ (20) | $ (3) | $ 19 |
Netcash used in investing activities | $ (2,480) | $ (2,093) | $ (2,251) |
Cashflows from financing activities: | |||
Changein bank checks outstanding | $ (45) | $ 96 | $ (70) |
Repayments of short-term borrowings | $ (51) | $ (103) | $ (287) |
Proceeds from short-term borrowings | $ 51 | $ 68 | $ 326 |
Proceeds from issuance of long-term debt | $ 1,125 | $ 117 | $ 3,717 |
Minimum tax withholdings on stock-based awards | $ (178) | $ (164) | $ (121) |
Excesstax benefits on stock-based awards | $ 86 | $ 84 | $ 61 |
Repurchases of common stock | $ (481) | $ (334) | $ (36) |
Cashdividend payments | $ (2,865) | $ (584) | $ (3,560) |
Otherfinancing activities, net | $ 34 | $ 34 | $ 14 |
Netcash provided by financing activities | $ (2,324) | $ (786) | $ 44 |
Net(decrease) increase in cash and cash equivalents | $ (937) | $ 1,094 | $ 1,116 |
Effectof foreign currency translation on cash and cash equivalents | $ (418) | $ (11) | $ (114) |
Cashand cash equivalents at beginning of period | $ 5,738 | $ 4,644 | $ 3,528 |
Cash and cashequivalents at end of period | $ 4,801 | $ 5,738 | $ 4,644 |
Supplemental disclosure of cash flow information: | |||
Cashpaid during the year for: | |||
Interest (reduced by $14, $11 and $12, interest capitalized in2015, 2014 and 2013, respectively) | $ 117 | $ 109 | $ 86 |
Incometaxes, net | $ 1,186 | $ 869 | $ 1,001 |
Supplemental disclosure of non-cash flow information: | |||
Property acquired under build-to-suit and capital leases | $ 109 | $ - | $ 11 |
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The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in condensed form.
1 | Year 2 | Year 1 | |
2 | Cash | $53,000.00 | $50,000.00 |
3 | Accounts Receivable (net) | 37,000.00 | 48,000.00 |
4 | Inventories | 108,500.00 | 100,000.00 |
5 | Investments | 70,000.00 | |
6 | Equipment | 573,200.00 | 450,000.00 |
7 | Accumulated Depreciation-Equipment | (142,000.00) | (176,000.00) |
8 | $629,700.00 | $542,000.00 | |
9 | Accounts Payable | $62,500.00 | $43,800.00 |
10 | Bonds Payable, Due Year 2 | 100,000.00 | |
11 | Common Stock, $10 par | 325,000.00 | 285,000.00 |
12 | Paid-In Capital in Excess of ParâCommon Stock | 80,000.00 | 55,000.00 |
13 | Retained Earnings | 162,200.00 | 58,200.00 |
14 | $629,700.00 | $542,000.00 |
The income statement for the current year is as follows:
1 | Sales | $625,700.00 | |
2 | Cost of merchandise sold | 340,000.00 | |
3 | Gross profit | $285,700.00 | |
4 | Operating expenses: | ||
5 | Depreciation expense | $26,000.00 | |
6 | Other operating expenses | 68,000.00 | 94,000.00 |
7 | Income from operations | $191,700.00 | |
8 | Other revenue and expense: | ||
9 | Gain on sale of investment | $4,000.00 | |
10 | Interest expense | (6,000.00) | (2,000.00) |
11 | Income before income tax | $189,700.00 | |
12 | Income tax | 60,700.00 | |
13 | Net income | $129,000.00 |
Additional data for the current year are as follows:
(a) | Fully depreciated equipment costing $60,000 was scrapped, no salvage, and new equipment was purchased for $183,200. |
(b) | Bonds payable for $100,000 were retired by payment at their face amount. |
(c) | 5,000 shares of common stock were issued at $13 for cash. |
(d) | Cash dividends declared and paid, $25,000. |
Required:
Prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. |
Labels and Amount Descriptions
Labels | |
For the Year Ended December 31, Year 2 | |
Amount Descriptions | |
Cash from sale of common stock | |
Cash from sale of investments | |
Cash paid for dividends | |
Cash paid for purchase of equipment | |
Cash paid to retire bonds payable | |
Decrease in accounts payable | |
Decrease in accounts receivable | |
Decrease in cash | |
Decrease in inventories | |
Depreciation | |
Gain on sale of investment | |
Increase in accounts payable | |
Increase in accounts receivable | |
Increase in cash | |
Increase in inventories | |
Loss on sale of investment | |
Net cash flow from financing activities | |
Net cash flow from investing activities | |
Net cash flow from operating activities | |
Net cash flow used for financing activities | |
Net cash flow used for investing activities | |
Net cash flow used for operating activities | |
Net income | |
Net loss |
Statement of Cash Flows
Prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Posner Company |
Statement of Cash Flows |
1 | Cash flows from operating activities: | ||
2 | |||
3 | Adjustments to reconcile net income to net cash flow from operating activities: | ||
4 | |||
5 | |||
6 | Changes in current operating assets and liabilities: | ||
7 | |||
8 | |||
9 | |||
10 | |||
11 | Cash flows from investing activities: | ||
12 | |||
13 | |||
14 | |||
15 | Cash flows from financing activities: | ||
16 | |||
17 | |||
18 | |||
19 | |||
20 | |||
21 | Cash at the beginning of the year | ||
22 | Cash at the end of the year |
A fire destroyed your firmâs 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 | ã | 598 | |
Receivables, net | ã | 230 | |
Inventories, net | ã | 2309 | |
Other current assets | ã | 47 | |
Total current assets | ã | 3184 | |
Property and equipment, net of accumulated depreciation | ã | 1292 | |
Assets held for sale | ã | 1 | |
Goodwill | ã | 76 | |
Intangible assets, net | ã | 29 | |
Other assets, net | ã | 32 | |
Assets, Total | ã | 4614 | |
Current liabilities: | ã | 0 | |
Current portion of long-term debt | ã | 0 | |
Accounts payable | ã | 2030 | |
Accrued expenses | ã | 380 | |
Other current liabilities | ã | 150 | |
Total current liabilities | ã | 2560 | |
Long-term debt | ã | 604 | |
Other long-term liabilities | ã | 239 | |
Commitments and Contingencies | ã | 0 | |
Stockholders Equity Attributable to Parent [Abstract] | ã | 0 | |
Preferred stock, nonvoting, $00001 par value | ã | 0 | |
Common stock, voting, $00001 par value | ã | 0 | |
Additional paid-in capital | ã | 520 | |
Treasury stock, at cost | ã | -27 | |
Accumulated other comprehensive income (loss) | ã | 3 | |
Retained earnings | ã | 715 | |
Total stockholders equity | ã | 1210 | |
Liabilities and Stockholders Equity, Total | ã | 4613 | |
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Year 2 | ||
Net sales | ã | ||
Cost of sales, including purchasing and warehousing costs | ã | ||
Gross profit | ã | ||
Selling, general and administrative expenses | ã | ||
Operating income | ã | ||
Interest expense | ã | ||
Other income, net | ã | ||
Total other, net | ã | ||
Income before provision for income taxes | ã | ||
Provision for income taxes | ã | ||
Net income | ã | ||
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 |