Assignment- Cash Flow Preparation

Assignment- Cash Flow Preparation - 29 Has the buildup in...

Info iconThis preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
Crosby Corporation Statement of Cash Flows For the Year Ended December 31, 2008 Cash flows from operating activities: Add back deprecation $150,000.00 Increase in accounts receivable ($350,000.00) Increase in inventory ($430,000.00) Decrease in prepaid expenses $30,000.00 Increase in accounts payable $440,000.00 Decrease in accrued expenses ($50,000.00) Total Adjustments Net cash flows from operating activities Cash flows from investing activites: ($2,400,000.00) Cash Flows from financing activities: $120,000.00 ($90,000.00) Common stock dividends paid ($120,000.00) Net income (earnings after taxes) Adjustments to determine cash flow from operating activities: Increase in investments (long-term securities) (70,000.00) Increase in plant and equipment Net cash flows from investing activities Increase in bonds payable Preferred stock dividends paid Net cash flows from financing activities Net increase (decrease) in cash flows
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
$160,000.00 ($210,000.00) ($50,000.00) ($90,000.00) ($2,610,000.00) ($2,470,000.00)
Background image of page 2
28 Describe the general relationship between net income and net cash flows from operating activi
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 4
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 29 Has the buildup in plant and equipment been financed in a satisfactory manner? Cash flows from operating activities is much more than net income. This occurs pri increase in Accounts payable by $440,000.Keeping this in mind a look at cash flow from daily operation. The buildup in plant and equipment of $2400,000 has been financed partly by the la should be financed by long term debt.Short term debt should noty be used for financ financing short term assets unsatisfied (which is not desirable). Here, firm can finan depreciation. So we can say , this is not a satisfactory situation. vites for the firm. imarily because we add back depreciation of $150,000 and statement gives insight how much cash flow was developed large increase in accounts payable (440,000). Long term assets cing long term asset as it can dry up leave the need of nce long term asset by mortgage, profits and add back...
View Full Document

This note was uploaded on 05/07/2010 for the course ACCOUNTING ACC225 taught by Professor Professor during the Spring '10 term at University of Phoenix.

Page1 / 4

Assignment- Cash Flow Preparation - 29 Has the buildup in...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online