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Discussion Questions
Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-3
Returning to the scenario presented in Discussion
Question 11-4, the credit sale made to the customer was
appropriately included in the income statement for the month
and flowed through to net income. In determining cash flow
from operations for the month, however, that sale must be
removed because it did not generate cash in the current
month. The same process must be repeated for any revenue
or expense item that did not generate or use cash during the
current month.
11-6. This question actually has two purposes. The first is to make
sure your students understand that the ending balance of
any item on the balance sheet is the beginning balance for
the next year. In the case of Pipkin Company, the balance of
accounts receivable on December 31, 2006 was $3,112,000,
which is the beginning balance of accounts receivable on
January 1, 2007.
The second purpose of the question is to help your
students become comfortable with using information from
comparative financial statements. Accounts receivable
decreased by $187,000 during 2007 ($3,112,000 beginning
balance - $2,925,000 ending balance).
11-7. This question actually has two purposes. The first is to make
sure your students understand that the ending balance of
any item on the balance sheet is the beginning balance for
the next year. In the case of Pipkin Company, the balance of
retained earnings on December 31, 2006 was $1,774,000,
which is the beginning balance of retained earnings on
January 1, 2007.
The second purpose of the question is to reinforce your
students= understanding of what causes retained earnings to
change. In the case of Pipkin Company, the increase in
retained earnings to $2,086,000 on December 31, 2007
F11-4 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
resulted from a combination of $449,000 net income for
2007 and paying $137,000 in dividends during 2007.
11-9. Using the direct method to prepare the cash flow statement
requires the extensive use of the income statement to
determine the cash flows from operations. The major
categories required by this format include cash flows from
customers, cash paid for merchandise, interest and taxes.
However, the figures from the income statement represent
the accrual basis measurement of the items B not
necessarily the cash paid or received. All of the numbers
from the income statement are used to derive the cash flow
statement numbers except for the depreciation amounts.
Because depreciation never involves cash flow, it is not part
of the cash flow from operations prepared with the direct
method. The only numbers that appear on the cash flow
statement are the interest expense and the taxes amount
because they are equal to the cash paid for those items.
11-10. Cash comes into the business and is used for many
activities that are unrelated to net income such as investing
and financing activities. For reasons discussed extensively
over the last several chapters, accrual basis net income for a
particular income statement period is not equal to cash. Net
income is a particular income statements period=s addition to
Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-5
retained earnings and dividends declared (whether paid
within the period or not) are deducted from retained
earnings. Therefore the only possible way that retained
earnings could equal cash is by sheer coincidence.
11-11. The cash flows generated from operating activities are the
same regardless of the format used. The indirect method
converts the income statement from the accrual basis to the
cash basis while the direct method analyzes the cash inflows
and cash outflows by major operating activity.
11-12. The direct method cash flow explains the operating sources
and uses of cash, similar to a cash basis income statement.
The indirect method explains the differences between the
accrual basis income statement and the cash derived from
operations. Regardless of method used to prepare the
operating section of the cash flow statement, the total cash
flows generated from operating activities are the same.
Students will frequently select the direct method because it
is the easiest to read and understand. More critical thinking
students will understand the powerful analysis contained in
the indirect method because it helps them to grasp the
reality of the difference between income and cash flow B or
the difference between the reality of performance and the
reality of cash.
F11-6 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
B. The main purpose of the statement of cash flows is to bring
the focus to cash and to report detailed information about the
sources and uses of cash.
Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-7
H. The starting point for cash flows from operations using the
indirect method is the accrual basis net income.
F11-8 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
Apply What You Have Learned
11-13.
1. b Provides a reconciliation of accrual net income to the cash
provided by or used by operating activities
2. e Accounting reports providing information from two or more
consecutive periods at once
3. j Investments in stocks and bonds that management
intends to hold for an indefinite period.
4. a Activities centered around the day-to-day business
transactions of a company
5. f Current assets less current liabilities
6. h Business activities related to long-term assets
7. g Provides detail as to the individual sources and uses of
cash associated with operating activities
8. c An item that reduces reported net income, but does not
require the use of cash
9. d Activities such as the issuance of debt or equity and the
payment of dividends
10. i Investments in stocks and bonds that management
intends to hold for an indefinite period.
11-14.
1. c Payment of dividends
2. a Adjustment for depreciation
3. a Purchase of merchandise inventory
4. b Purchase of vehicles
5. c Repayment of 90-day loans
6. c Issuing capital stock
7. a Payment of wages to employees
8. a Payment of taxes
9. b Cash from sale of property and equipment
10. b Loans to other companies
11. a Adjustments for changes in current assets and current
liability items
12. a Cash from selling trading securities
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-9
11-15.
1. a Amortization Expense
2. a Depreciation Expense
3. a Sale of merchandise inventory
4. c Sale of Treasury Stock
5. c Repayment of 30-day loans
6. c Purchase of one’s own stock
7. a Payment of rent on office space
8. a Payment of insurance on factory equipment
9. c Cash from sale of treasury stock
10. b Purchase of stock in other companies
11. b Cash from the sale of available-for-sale securities
12. a Cash from the collection of accounts receivable
11-16.
1. U Accounts payable decreased.
2. N Property and equipment increased.
3. U Accounts receivable increased.
4. N Long-term notes payable decreased.
5. S Prepaid expenses decreased.
6. S Short-term notes payable increased.
7. U Taxes payable decreased.
8. N Common stock increased.
9. S Wages payable increased.
10. S Merchandise inventory decreased.
F11-10 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
11-17.
Jackson Company
Partial Statement of Cash Flows
For the Year Ended December 31, 2008
(in thousands)
$
406
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation
Expense
$ 175
Decrease in
Accounts
Receivable
387
Increase in
Merchandise
Inventory
(204)
Decrease in
Prepaid Expenses
30
Increase
in
Accounts
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-11
Payable
581
969
Net Cash Provided by Operating Activities
$1,375
11-18.
Scotia Company
Partial Statement of Cash Flows
For the Year Ended December 31, 2007
$ 86,900
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation Expense
$102,000
Increase in Accounts
Receivable
(277,000)
Decrease in Merchandise Inventory 126,000
Increase in Prepaid Expense ( 13,000)
Decrease in Accounts
Payable (276,000)
(338,000)
Net Cash Used by Operating Activities $(251,100)
F11-12 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
11-19.
Powers Corporation
Partial Statement of Cash Flows
For the Year Ended December 31
$450,000
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Decrease in Accounts
Receivable $
7,000
Decrease
in
Uncollecti
ble
Accounts
(2,000)
Increase in
Merchandise
Inventory
(19,000)
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-13
Decrease in Prepaid Expenses
12,000
(2,000)
Net Cash
Provided
by
Operating
Activities
$448,000
11-20.
Mavis Company
Partial Statement of Cash Flows
For the Year Ended
$ 60,000
Investment in
Bonds
(80,000)
Net Cash
Used For
Investing
Activities
$(20,000)
11-21.
F11-14 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
Nash Company
Partial Statement of Cash Flows
For the Year Ended
$ 40,000
Investment in
Bonds
(980,000)
Net Cash Used For Investing Activities
$(940,000)
11-22.
Rambler Corporation
Partial Statement of Cash Flows
For the Year Ended
$ 20,000
Purchase of
Equipment
(980,000)
Net Cash Used For Investing Activities
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-15
$(960,000)
11-23.
Reo Company
Partial Statement of Cash Flows
For the Year Ended
200,000
Dividends Paid
(28,000)
Purchase of Treasury Stock
(60,000)
Net Cash Provided by Financing Activities
$1,002,000
11-24.
Diamond Company
Partial Statement of Cash Flows
For the Year Ended
F11-16 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
Cash Flows from Financing Activities:
Proceeds from
the sale of
Preferred
Stock $
200,000
Proceeds from
bank loan
300,000
Proceeds from
sale of
Treasury Stock
160,000
Dividends Paid
(80,000)
Repayment of
bank loan
(120,000)
Net Cash Provided by Financing Activities $ 460,000
11-25.
Cirrus Company
Partial Statement of Cash Flows
For the Year Ended
300,000
Proceeds from
sale of
Common
Stock
500,000
Dividends Paid
(75,000)
Repayment of
bank loan
(400,000)
Net Cash Provided by Financing Activities $ 425,000
11-26.
a. Investing activities: $1,559,000
b. The statement of cash flows, by itself, cannot tell you
anything with certainty about Rock Company. In the long run,
however, you would expect a company to use the majority of
its cash for investing activities, which may indicate the
company is growing. The statement of cash flows, however,
does not indicate the quality of the investment – only that the
investment was made.
c. Financing activities: $1,000,000
d. In 2008, Rock had to rely on outside financing, which is often
appropriate and necessary when a company is expanding.
F11-18 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
Financing activities, however, are not the most appropriate
source of cash in the long run. In the long run, cash must be
generated from operating activities.
11-27.
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-19
11-28.
a. Hoople Company
Statement of Cash Flows
For the Year Ended December 31, 2008
(in thousands)
$11,415
Cash paid for:
Merchandise
$7,723
Selling and administrative expense 2,706
Interest
168
Income taxes
F11-20 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
114 (10,711)
Net Cash Provided by Operating Activities
$
704
$(1,526)
Purchase of Equipment
( 289)
Net Cash Used By Investing Activities
(1,815)
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-21
(200)
1,509
Net Increase in Cash During 2008
$
398
Beginning Cash Balance, January 1, 2008
1,220
Ending Cash Balance, December 31, 2008
$
1,618
11-28. (Continued)
11-29.
a.
Hoople Company
Statement of Cash Flows
For the Year Ended December 31, 2008
(in thousands)
$
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-23
426
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation
Expense
$ 102
Decrease in
Accounts
Receivable
187
Incre
ase
in
Merc
hand
ise
Inve
ntory
(104
)
Increase in Prepaid
Expense
( 39)
Increase
in
Accounts
Payable
F11-24 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
132
278
Net Cash Provided by Operating Activities
$
704
$(1,526)
Purchase of Equipment
( 289)
Net Cash Used By Investing Activities
(1,815)
(200)
1,509
Net Increase in Cash During 2008
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-25
$
398
Beginning Cash Balance, January 1, 2008
1,220
Ending Cash Balance, December 31, 2008
$1,618
11-29. (Continued)
Supplemental Schedule:
Amount paid for:
Interest $168
Income Taxes $114
F11-26 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
11-30.
a. Al Muzny Company
Statement of Cash Flows
For the Year Ended December 31, 2007
(in thousands)
$(339)
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation
Expense
$ 45
Decrease in
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-27
Accounts
Receivable
Decr
ease
in
Merc
hand
ise
Inve
ntory
56
Decrease in
Prepaid
Expense
24
Decrease in
Accounts Payable
(83) 47
Net Cash Used by Operating Activities
$(292)
Purc
hase
F11-28 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
of
Build
ing
$(31
9)
Purchase of
Equipment
(200)
Net Cash Used By Investing Activities
(519)
$
450
Proceeds from
Sale of
Common
Stock
300
Pay
ment
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-29
of
Cas
h
Divid
ends
(70)
$(131)
Beginning Cash Balance, January 1, 2007
660
Ending Cash Balance, December 31, 2007
$
529
Supplemental Schedule:
Amount paid for interest
$145
Amount paid for income
taxes $ -0-
11-30. (Continued)
$
659
Less: Net Loss for 2007
$339
Dividends Declared in 2007
70
(409)
Retained Earnings, December 31, 2007
$(250)
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-31
11-31.
a.
Al Muzny Company
Statement of Cash Flows
For the Year Ended December 31, 2007
(in thousands)
$6,396
Cash paid for:
Merchandise
$4,501
Selling and administrative expenses 2,042
Interest
145
(6,688)
Net Cash Used by Operating Activities
$
(292)
F11-32 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
Purc
hase
of
Build
ing
$
(319
)
Purchase of Equipment
(200)
Net Cash Used By Investing Activities
(519)
(70)
660
Ending Cash Balance, December 31, 2007
$
529
11-31. (Continued)
$
659
Less: Net Loss for 2007
$339
Dividends Declared in 2007
70
(409)
Retained Earnings, December 31, 2007
$(250)
11-32.
a. In the long run, you expect a company to use the majority of
its cash for investing activities. Healthy companies provide
the majority of cash from operating activities. Job certainly
did both of these things in the year for which this statement
of cash flows was prepared. If this is representative of the
company’s long-term performance, Job and Company is
probably a well-run, healthy company.
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-35
b. None of the financial statements should be viewed as
independent of the others. At a very minimum, you would
want to see the income statement and balance sheet from
which the statement of cash flows was created. From the
income statement, it would be important to determine if the
cash from operations resulted from recurring sources.
It would also be helpful to see financial statements for
more than one period. This period may not represent the
company’s long-term performance, in which case it would
not be a good basis for predictions of future performance.
While the totals shown on Job’s statement of cash flows
look very positive, the statement does not address the
quality of the investments made during this period – only that
the investments were made.
c. There is no way to determine from the information provided
in the problem whether Job had a net income or a net loss.
Net income or loss is only a starting point for determining
cash generated by operating activities. It is quite possible for
a company to have a net loss and still generate cash from
operations.
At a minimum, you would want to see the income
statement and balance sheet from which the statement of
cash flows was created. It would also be helpful to see
income statements for more than one period. A single
period’s information will not provide enough information to
predict the company’s future performance.
11-33.
a. In the long run, you expect a company to use the majority of
its cash for investing activities. Healthy companies provide
the majority of cash from operating activities. For this year,
Coleman did not generate positive cash flow through its
operations. Financing activities provided the cash to support
the company’s operating and investing activities. If this is
representative of the company’s long-term performance,
F11-36 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
Coleman and Company may not be a well-run, healthy firm.
b. None of the financial statements should be viewed as
independent of the others. At a very minimum, you would
want to see the income statement and balance sheet from
which the statement of cash flows was created.
It would also be helpful to see financial statements for
more than one period. This period may not represent the
company’s long-term performance, in which case it would
not be a good basis for predictions of future performance.
While Coleman’s statement of cash flows shows the
company used the majority of its cash for investing activities,
the statement does not address the quality of the
investments made during this period – only that the
investments were made.
c. There is no way to determine from the information provided
in the problem whether Coleman had a net income or a net
loss. Net income or loss is only a starting point for
determining cash generated by operating activities. It is quite
possible for a company to have net income and still use cash
from other sources to finance its operations.
At a minimum, you would want to see the income
statement and balance sheet from which the statement of
cash flows was created. It would also be helpful to see
income statements for more than one period. A single
period’s information will not provide enough information to
predict the company’s future performance.
11-34.
a. During the year covered by this statement of cash flows,
Faulkner and Company generated cash from its investing
activities. Whether this was from selling property, plant, and
equipment or from selling investments it held in other
companies cannot be determined from the information
provided in the problem. The operating activities section
shows a rather large use of cash, which may suggest that
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-37
the company was forced to generate cash from its
investments in order to support its operations. Overall,
financing activities used more cash than they generated this
period. If this is representative of the company’s long-term
performance, Faulkner and Company may not be a very
healthy company.
b. At a minimum, you would want to see the income statement
and balance sheet from which the statement of cash flows
was created. It would be important to determine if the fact
that operations used cash instead of generating cash was
the result of a recurring or nonrecurring situation. While
Faulkner’s statement of cash flows shows it generated cash
from investing activities, the balance sheet will tell more
about the company’s financial position after selling assets to
generate cash this period.
It would also be helpful to see financial statements for
more than one period. This period may not be representative
of the company’s recent performance.
11-35.
a. The use of accrual accounting shifts the focus of financial
statements from cash to earnings. Under accrual-basis
accounting, revenue and expense recognition is unrelated to
when cash is received or paid. For this reason, users of
accrual basis financial statements cannot determine what
caused the change in cash from one period to the next from
the income statement and the balance sheet.
F11-38 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
b. The statement of cash flows brings the focus of economic
decision makers back to cash by providing a detailed
analysis of the change in cash from one period to the next.
The operating activities section of the statement is
essentially a conversion of accrual accounting back to cash
accounting. The investing and financing activities sections
describe the cash flowing in and out of the company as a
result of activities other than operations.
11-36.
The two methods for preparing the statement of cash flows,
the direct method and the indirect method relate only to the
operating section of the cash flow statement, and both arrive at
the same amount of cash flow from operations. Cash flows from
investing and financing activities are identical in either method.
The two methods are markedly different in presenting the cash
flows from operations. The direct method of preparing the cash
flows from operations transforms the income statement into a
statement of cash receipts and disbursements. This is
accomplished by reversing the accruals and deferrals used to
create accrual basis financial statements.
The indirect or reconciliation method receives its name from
its format, which begins with net income and transforms net
income into cash flow from operations. This process is possible
because most items involved in net income, except for
depreciation and amortization, are either already cash or are
expected to eventually become cash.
11-37.
a. Depreciation Expense = $37,500
Beginning
Accumula
ted
Depreciat
ion
$
95,000
– Accumulated Depreciation from asset sold
3,500
+ Depreciation Expense for the Year
37,500
= Ending Balance of Accumulated Depreciation $129,000
Beginning Machinery
Balance $450,000
– Cost of Machinery Sold 49,500
= Sub Total
$400,500
– Ending Balance 475,500
= Purchases $
75,000
F11-40 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
11-38.
a. Depreciation Expense = $41,000
Beginning
Accumula
ted
Depreciat
ion
$65,000
– Accumulated Depreciation from asset sold
17,000
+ Depreciation Expense for the Year
41,000
= Ending Balance of Accumulated Depreciation $89,000
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-41
Beginning Machinery
Balance $250,000
– Less: Cost of Machinery Sold 65,000
= Sub Total
185,000
– Ending Balance 280,000
Purchases
$ 95,000
11-39.
a. Depreciation Expense = $82,000
Beginning
Accumula
F11-42 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
ted
Depreciat
ion
$165,000
– Accumulated Depreciation from asset sold
32,000
+ Depreciation Expense for the Year
82,000
= Ending Balance of Accumulated Depreciation $215,000
Beginning Machinery
Balance $300,000
– Less: Cost of Machinery Sold
40,000)
= Sub Total
$260,000
+ Purchases
130,000
= Ending Balance
$390,000
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-43
11-40.
Foster Company
Partial Statement of Cash Flows
For The Year Ended December 31, XXXX
$450,000
Interest
on investments
5,000
$455,000
Cash paid for:
Employees wages
$ 64,000
Suppliers for
merchandise 150,000
Interest
85,000
Income
taxes
75,000
374,000
$435,000
Interest
on investments
15,000
$450,000
Cash paid for:
Employees wages
$ 95,000
Suppliers for
merchandise 260,000
Interest
68,000
Income
taxes
45,000
468,000
Net Cash Used in Operating Activities $
(18,000)
11-42.
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-45
Porter Company
Partial Statement of Cash Flows
For The Year Ended December 31, XXXX
$1,255,000
Interest
on investments
95,000
$1,350,000
Cash paid for:
Employees wages
$460,000
Suppliers for
merchandise 988,000
Interest
35,000
Income
taxes
245,000
1,728,000
Net Cash Used in Operating Activities $
(378,000)
F11-46 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
11-43.
Wolf Company
Statement of Cash Flows
For The Year Ended December 31, 2007
$95,000
Dividends from
investments
200
$95,200
Cash paid for:
Operating expenses
$ 8,000
Suppliers for merchandise
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-47
29,000
Interest
200
Wages to
employees
9,500
46,700
Net Cash Provided by Operating Activities
$48,500
(20,000)
Proceeds of
equipment sale
4,000
Purchase of Ford
Company stock
(5,000)
Net Cash Used in Investing Activities
(23,000)
12,000
$37,500
11-44.
RoJo Company
Statement of Cash Flows
For The Year Ended December 31, 2008
$75,000
Dividends from
investments
100
$75,100
Cash paid for:
Operating expenses
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-49
$ 3,000
Suppliers for merchandise
32,000
Interest
100
Wages to
employees
4,500
39,600
Net Cash Provided by Operating Activities
$35,500
(8,000)
Proceeds of
equipment sale
1,000
Purchase of Dupont
stock
(2,000)
Net Cash Used in Investing Activities
(10,000)
(1,400)
9,100
$34,600
11-45.
Byrd Company
Statement of Cash Flows
For The Year Ended December 31, 2008
$46,550
(3,000)
Proceeds of
equipment sale
2,000
Purchase of Lucent
stock
F11-52 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
(1,000)
Net Cash Used in Investing Activities
(4,000)
Payment of cash
dividend
(100)
Borrowing from
bank
8,000
Payment on loan
(2,500)
Net Cash Provided by Financing Activities
14,400
$56,950
11-46.
a.
The Walt Disney Company and Subsidiaries
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-53
Cash Flow Information
For the Years Ended September 30
(in millions)
2005
2004
2003
Operating Activities $
4,269 $
4,370 $
2,901
Financing Activities
$(2,897)
$(2,701)
$(1,523)
Investing Activities
$(1,691)
$(1,484)
$(1,034)
F11-54 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
11-47.
a.
Target Corporation
Cash Flow Information
For the Fiscal Years Ended
(in millions)
2005
2004
2003
Operating Activities $
4,451 $
3,808
$3,188
Financing Activities $
(899)
$(2,824) $
(313)
Investing Activities
$(4,149)
$ 1,179
$3,209
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-55
b. Target uses the indirect method to report operating cash
flows.
11-48.
a.
Darden Restaurants
Cash Flow Information
For the Fiscal Years Ended
(in thousands)
5-
28-06
5-29-05
5-30-04
F11-56 Chapter 11 - Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash
Operating Activities $ 717,090
$
583,242 $
525,411
Financing Activities $(392,941)
$(263,994)
$(194,090)
Investing Activities $(324,616)
$(313,141)
$(343,257)
Chapter 11 – Tools of the Trade, Part III, The Statement of Cash Flows:
Bringing the Focus Back to Cash F11-57