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23C Study Guide - Cash Flow Statement, Financial Statement, Income Statement

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salyvm
26 Jan 2023
School
Bharathiar University
Department
Business
Course
23C
Professor

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Document Summary

Fund may be interpreted in various ways as (a) cash, (b) total current assets, (c) net working capital, (d) net current assets. For the purpose of fund flow statement, the term means net working capital. The flow of fund will occur in a business, when a transaction results in a change i. e. , increase or decrease in the amount of fund. According to robert anthony the funds flow statement describes the sources from which additional funds were derived and the uses to which these funds were put. In short, it is a technical device designed to highlight the changes in the financial condition of a business enterprise between two balance sheets. A statement of sources and uses of fund. A statement of sources and application of fund. To help to understand the changes in assets and asset sources which are not readily evident in the income statement or financial statement.

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Related Questions

*******URGENT**** please answer. Directions are there. Very urgent

Comparative financial statements for Weller Corporation, a merchandising company, for the year ending December 31 appear below. The company did not issue any new common stock during the yoac. A total of 700,000 shares of common stock were outstanding. The Interest rate on the bond payable was 10%, the income tax rate was 40%, and the dividend per share of common stock was $ 0.75 last year and $ 0.40 this year. The market value of the company's common stock at the end of this year was $ 27. All of the company's sales are on account.

Required:
Compute the following financial data and ratios for this year:
 
1. Working capital. (Enter your answer in thousands.)
2. Current ratio. (Round your answer to 2 decimal places.)
3. Acid-test ratio. (Round your answer to 2 decimal places.)
 
1. Working capital  
2. Current ratio  
3. Acid-4est ratio  
Which of these statements about corporate bonds is correct? 
A. Bonds provide equity financing.
B. Issuing new bonds dilutes the existing ownership in the firm.
C. Interest paid to bondholders represents a tax-deductible business expense.
D. Debenture bonds require assets pledged as collateral.

 

***URGENT*** please solve and provide both statements of cash flows for me. Disregard the answers that I have. Please help very urgent

The following changes took place last year in Pavolk Corpary's balance sheet accounts:

D = Decrease    I = Increase. 
 
Long-term investment's that cost the company $ 21 were sold during the year for $ 46 and land that cost $ 45 was sold for $24. In addition, the company declared and paid $ 18 in cash dividends during the year. Besides the sole of land, no other sales or retirements of plant and equipment took place during the year. Pavolk did not retire any bonds during the year or issue any new common stock.
 
The company's income statement for the year follows:
 
 
The comparty's beginning cash balance was $ 128 and its ending balance was $ 108.
 
Required:
1. Use the indirect method to determine the net cash provided by operating activities for the year.
2. Prepare a statement of cash flows for the year
 
Required 1
Use the indirect method to determine the net cash provided by operating activities for the year. (Adjustment amounts that are to be deducted should be indicated with a minus sign.)
 
Pavolik Company
 Statement of Cash Flows (partial)
 Net income    $     100
 Adjustments to convert net income to a cash basis:    
Depression $      82  
Loss on sale of land 21  
Gain on sale of long-term investments (25)  
     
Increase in accounts receivable (24)  
Decrease in inventory 58  
Increase in prepaid expenses (19)  
Increase in accounts payable 62  
Decrease in accrued liabilities           (24)  
Increase in income taxes payable   131
 Net cash provided by operating activities    $  231
 
Required 2
      Prepare a statement of cash flows for the year. (List any deduction in cash and cash outflows as negative amounts.)
 
Pavolik Company
 Statement of Cash Flows 
 Operating activities:    
 Net cash provided by operating activities        $   231
 Investing activities:    
 Proceeds from sale of long-term investments    
 Proceeds from sale of land           24  
 Additions to property, plant & equipment    
     
 Net cash used in investing activities           24
 Financing activities:    
 Issuance of bonds payable    
 Purchase of common stock    
 Cash dividends    
     
 Net cash provided by financing activities             0
 Net decrease in cash           255
 Beginning cash and cash equivalents    
 Ending cash and cash equivalents       $  255