homowork - Leah Celani Exercise 5-16 Le (a) OROZCO CORPORAT...

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Unformatted text preview: Leah Celani Exercise 5-16 Le (a) OROZCO CORPORAT ION Statement of Cash Flows For the Year Ended December 31, 2010 Cash flows from operating activities Net income $105,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense $27,000 I ncrease in accounts receivable (16,000) Decrease in inventory 9,000 Decrease in accounts payable (13,000 ) 7,000 Net cash provided by operating activities 112,000 Cash flows from investing activities Sale of land 39,000 Purchase of equipment (70,000 ) Net cash used by investing activities (31,000) Cash flows from financing activities Payment of cash dividends (40,000 ) Net increase in cash 41,000 Cash at beginning of year 22,000 Cash at end of year $ 63,000 Leah Celani Exercise 5-16 Le Noncash investing and financing activities Issued common stock to retire $50,000 of bonds outstanding Leah Celani Exercise 5-16 Le EXERCISE 5-16 (Continued) (b) Current cash debt coverage ratio = = Net cash provided by operating activities Average current liabilities = $112,000 ($34,000 + $47,000)/2 = 2.77 to 1 Cash debt coverage ratio = = Net cash provided by operating activities...
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This note was uploaded on 11/29/2010 for the course ACC 331 taught by Professor Dr.lee during the Fall '10 term at Jefferson College.

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homowork - Leah Celani Exercise 5-16 Le (a) OROZCO CORPORAT...

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