MGAB01H3 Study Guide - Final Guide: Share Capital, Cash Flow Statement, Current Liability
Get access
Related Documents
Related Questions
Ravenna Company is a merchandiser that uses the indirect methodto prepare the operating activities section of its statement ofcash flows. Its balance sheet for this year is as follows: |
| Ending Balance | Beginning Balance | ||
Cash | $ | 52,800 | $ | 62,700 |
Accounts receivable | 45,100 | 48,400 | ||
Inventory | 60,500 | 55,000 | ||
Total current assets | 158,400 | 166,100 | ||
Property, plant, and equipment | 165,000 | 154,000 | ||
Less accumulated depreciation | 55,000 | 38,500 | ||
| ||||
Net property, plant, and equipment | 110,000 | 115,500 | ||
Total assets | $ | 268,400 | $ | 281,600 |
| ||||
Accounts payable | $ | 35,200 | $ | 62,700 |
Income taxes payable | 27,500 | 30,900 | ||
Bonds payable | 66,000 | 55,000 | ||
Common stock | 77,000 | 66,000 | ||
Retained earnings | 62,700 | 67,000 | ||
| ||||
Total liabilities and stockholdersâ equity | $ | 268,400 | $ | 281,600 |
During the year, Ravenna paid a $6,600 cash dividend and it solda piece of equipment for $3,300 that had originally cost $6,600 andhad accumulated depreciation of $4,400. The company did not retireany bonds or repurchase any of its own common stock during theyear. |
1. | What is the amount of the net increase or decrease in cash andcash equivalents that would be shown on the companyâs statement ofcash flows? |
3. | How much depreciation would the company add to net income on itsstatement of cash flows? |
5-a. | What is the amount and direction (+ or â) of the accountsreceivable adjustment to net income in the operating activitiessection of the statement of cash flows? |
5-b. | What does this adjustment represent? | ||||||
|
7-a. | What is the combined amount and direction (+ or â) of theinventory and accounts payable adjustments to net income in theoperating activities section of the statement of cash flows? | ||||||
7-b. | What does this amount represent? | ||||||
|