Reading 34: Understanding the Cash Flow Statement - LOS f, black, method, direct, change, net

mayanfang1

Q21. Under the direct method, what will Stone find Soft Corporation's projected net change in cash to be for the year ending December 31, 2005?

A)   $2,000,000.

B)   $9,000,000.

C)   $4,000,000.

Q22. An analyst has gathered the following information about a company:

Income Statement for the Year 2005
Sales							$1,500
Expenses
	COGS					$1,300
	Depreciation					20
	Goodwill					10
	Int. Expenses					40
					Total expenses		1,370
Income from cont. op.							130
				Gain on sale			30
Income before tax							160
Income tax							64
Net Income							$96

 

Additional Information:
Dividends paid	30
Common stock sold	20
Equipment purchased	50
Bonds issued	80
Fixed asset sold for (original cost of $100 with accumulated depreciation of $70)	60
Accounts receivable decreased by	30
Inventory decreased by	20
Accounts payable increased by	20
Wages payable decreased by	10

What is the cash flow from investing?

A)   $130.

B)   $20.

C)   $10.

Q23. An analyst contemplates using the indirect method to create the projected statement of cash flows. She decides to research the differences between the direct and indirect methods. Which of the following is least likely a component of the statement of cash flows under the direct method?

A)   Payment of dividends.

B)   Net income.

C)   Property, Plant, & Equipment.

mayanfang1

答案和详解如下：

Q21. Under the direct method, what will Stone find Soft Corporation's projected net change in cash to be for the year ending December 31, 2005?

A)   $2,000,000.

B)   $9,000,000.

C)   $4,000,000.

Correct answer is A)

Soft Corporation's net cash flow from operations are $1.0 million, they spent $(25.0) million on PP&E, and received $26.0 million from financing activities. This makes the net change in cash $2,000,000. Note that projected cash for 2005 is 2.0 million greater than at year-end 2004.

Q22. An analyst has gathered the following information about a company:

Income Statement for the Year 2005
Sales							$1,500
Expenses
	COGS					$1,300
	Depreciation					20
	Goodwill					10
	Int. Expenses					40
					Total expenses		1,370
Income from cont. op.							130
				Gain on sale			30
Income before tax							160
Income tax							64
Net Income							$96

 

Additional Information:
Dividends paid	30
Common stock sold	20
Equipment purchased	50
Bonds issued	80
Fixed asset sold for (original cost of $100 with accumulated depreciation of $70)	60
Accounts receivable decreased by	30
Inventory decreased by	20
Accounts payable increased by	20
Wages payable decreased by	10

What is the cash flow from investing?

A)   $130.

B)   $20.

C)   $10.

Correct answer is C)

Purchase of equipment    -$50

Fixed asset sold             $60

       CFI                             $10

Q23. An analyst contemplates using the indirect method to create the projected statement of cash flows. She decides to research the differences between the direct and indirect methods. Which of the following is least likely a component of the statement of cash flows under the direct method?

A)   Payment of dividends.

B)   Net income.

C)   Property, Plant, & Equipment.

Correct answer is B)

Property, Plant, & Equipment and payment of dividends are components of the statement of cash flows under both the direct and indirect methods. Net income is the first figure under the indirect method, but it is not a part of the statement of cash flows under the direct method. The correct response is net income.

mcdullpong

  thanks

wxvivian

 t

sorrybabyfish

thx

cq200564

1

saint_zhu

无风险，套利

wangyoucao

thanks

hjl2000

d

gracesun

 thanks