ACCCHAPTER54 - 5-61 (40-60 min.) This problems includes the...

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5-61 (40-60 min.) This problems includes the complication of gains and losses on asset sales and debt retirement. ADIRONDAK TOYS, INC. Statement of Cash Flows For the Year Ended December 31, 20X4 (In Thousands) Cash flows from operating activities: Cash collections from customers ($9,739 + $19) $ 9,758 Dividends received 152 $ 9,910 Cash payments: To suppliers and employees $ (8,074) For interest ($144 – $15) (129) For taxes (390 ) Cash disbursed for operating activities (8,593 ) Net cash provided by operating activities $ 1,317 Cash flows from investing activities: Purchase property, plant & equipment $ (1,986) Purchase stock in Lake Placid Toy (3,848) Proceeds from sale of property 500 Net cash used by investing activities (5,334) Cash flows from financing activities: Issue common stock 3,300 Cash received on exercise of stock options 170 Issue long-term debt 1,906 Retire long-term debt (850) Buy treasury stock (249) Cash dividends paid (240 ) Net cash provided by financing activities 4,037 Net increase in cash and cash equivalents 20 Note that (h) regarding the money market fund is irrelevant; it merely rearranges the composition of the total cash holdings. The non-cash purchase of new equipment in (d) would be shown in an accompanying schedule. Similarly for transactions (f) and (j). 1
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5-61 (continued) Reconciliation of Net Income to Net Cash Provided by Operating Activities Net income $ 672 Adjustments to reconcile net income to net cash provided by operating activities: Add: Depreciation and amortization 615 Loss on sale of fixed assets (500 – 576) 76 Deduct: Gain on extinguishment of debt (900 – 850)(50) Increase in inventories (72) Decrease in accounts receivable 19 Increase in accounts and wages payable 7 Increase in interest payable 15 Increase in taxes payable 35 Net cash provided by operating activities $1,317 Schedule of Noncash Investment and Financing Activities Issue note payable for purchase of equipment $ 516 Issue common stock for conversion of long-term debt 960 Issue common stock to acquire Sanchez Musical Instruments Co. 297 2
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5-62 (20 min.) NORDSTROM, INC. Statement of Cash Flows Cash flows from Operating Activities For the Year Ended January 31, 2003 (In Millions) Cash collections from customers $5,917 (a) Other cash collections 74 Total Collections 5,991 Cash Payments: To suppliers $4,098 (b) For selling, general and administrative expenses 1,484 (c) For interest 82 For taxes 48 (d) Total cash payments 5,712 Net cash provided by operating activities $ 279 (a)$5,975 – $58 $3,971 + $117 + $10 (c)$1,814 – $288 - $1– $24 – $17 $92 – $44 3
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5-63 (15-20 min.) Amounts are in millions. 1. Kellogg's free cash flow each year was: (In Millions) 2002 2001 2000 Operating cash flow $ 999.9 $1,132.0 $ 880.9 Additions to properties (253 .5) (276 (230 .9) Free cash flow before dividends 746.4 855.5 650.0 Dividends (412 .6 ) (409 .8 ) (403 .9 ) Free cash flow after dividends $ 333 $ 445 .7 $ 246 .1 2. Kellogg’s has plenty of cash flow from operations each year to pay its capital investment needs and its dividends. It’s best free cash flow was in 2001, and it fell slightly in 2002.
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ACCCHAPTER54 - 5-61 (40-60 min.) This problems includes the...

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