Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Ron Nord and Lisa Smith are examining the following statement of cash flowsfor Carpino Company for the year ended January 31, 2007.
CARPINO COMPANY
Statement of Cash Flows
For the Year Ended January 31, 2007
Sources of cash
From sales of merchandise
$380,000
From sale of capital stock
420,000
From sale of investment (purchased below)
80,000
From depreciation
55,000
From issuance of note for truck
20,000
From interest on investments
6,000
Total sources of cash
961,000
Uses of cash
For purchase of fixtures and equipment
330,000
For merchandise purchased for resale
258,000
For operating expense (including depreciation)
160,000
For purchase of investment
75,000
For purchase of truck by issuance of note
For purchase of treasury stock
10,000
For interest on note payable
3,000
Total uses of cash
856,000
Net increase in cash
$105,000
Ron claims that Carpino's statement of cash flows is an excellent portrayal of a superbfirst year with cash increasing $105,000. Lisa replies that it was not a superb first year.Rather, she says, the year was an operating failure, that the statement is presented incorrectly,and that $105,000 is not the actual increase in cash. The cash balance at thebeginning of the year was $140,000.
Instructions
With the class divided into groups, answer the following.
(a) Using the data provided, prepare a statement of cash flows in proper form using the indirect method. The only noncash items in the income statement are depreciation and the gain from the sale of the investment.
(b) With whom do you agree, Ron or Lisa? Explain your position.
Variable and absorption costing unit product costs and income statement; Explanation of Difference in Net Operating Income
How should the estimated opportunity costs with the growing traffic gridlock be adjusted if the study has not accounted for the fact that motorists can make cellular phone calls while traveling on freeways? Explain.
When did you earn your revenue for both parties? What caused you to earn the revenue? Did you earn the revenue at the moment you received cash?
Compute the net present value of this proposal. On the merits of your net present value computation, should Cavalier Skilled Nursing Homes invest in this project? Explain your answer.
Prepare the journal entries for the current month. Do not prepare any entries for transactions that relate to the following month.
Complete the monthly flexible budget for each $10,000 increment of sales within the relevant range for the year ending December 31, 2010.
Describe the history, current status, and adoption implications of a Financial Accounting Standards Board ongoing project.
How does this transaction affect Investment in Ricardo account that appears on DeMilo’s financial records? Investment in Ricardo should be increased by$?
Jill Parsons purchases for $72,000 Jamar"s interest in the Tholen-Jamar partnership. Assuming that Jamar has a $68,000 capital balance in the partnership, what journal entry is made by the partnership to record this transaction?
The potential forms of ex-post opportunistic behaviour that managers may still engage in despite the existence of performance contracts?
the city purchased new computer equipment costing 19000 by paying 3000 in cash and signing a long-term note payable for
theory about probable role of the monthly report.the controller of a small private college is complaining about the
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd