Reading 34: Understanding the Cash Flow Statement - LOS f, following, company, border, about

mayanfang1

Q13. An analyst has gathered the following information about a company:

Income Statement 2005
Sales				$908
Expenses
	COGS		$512
	Depreciation		6
	Selling, General & Admin.		129
	Interest		53
		Total expenses		700
Pre-tax income				208
Taxes				83
Net income				$125

 

Balance Sheet
Assets	2004	2005		Liabilities	2004	2005
Cash	60	80		Accts. Payable	100	75
Accts. Rec.	140	155		Wages payable	80	85
Inventories	47	72		Bonds	65	80
Fixed Assets	120	160		Common Stock	40	70
Accum. Depr.	(29)	(35)		Retained Earnings	53	122
Total	338	432			338	432

Note: the dividend payout ratio equals 45%.

What is the net increase or decrease in cash?

A)   +$20.

B)   +$15.

C)   -$15.

Q14. Which of the following statements about the indirect method of calculating the statement of cash flows is FALSE?

A)   No adjustment is needed to account for extraordinary items because they are found above net income and are thus already accounted for.

B)   An adjustment is needed for the payment of deferred taxes.

C)   No adjustment is needed to account for changes in accounts receivable since no cash was involved.

Q15. Which of the following is TRUE about the consideration of depreciation in the operations section of a cash flow statement?

    Direct Method            Indirect Method

A)   Does not consider        Considers

B)   Does not consider        Does not consider

C)   Considers                    Considers

gaoflex

thank you so much.

shannyzheng

THANK YOU !!!

风吹竹面

Thanks a lot

kepei7763

thx

zsd425

 谢谢

hnzjbenson

 uu

kenshinpet

thx

chrisyikhei

yes

khaipinglai

 thanks