The fact that its balanceis 500000 impliesthat webb

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Unformatted text preview: of some of its nonoperating assets. These cash inflows were then used to retire some of the company's debt and/or to reacquire some of its outstanding stock. P14–7 a. 2008 2007 2006 Cash provided (used) by operating activities $14,591 $9,606 $11,353 Cash provided (used) by investing activities (13,711) (9,123) (2,787) Cash provided (used) by financing activities (2,020) (5,590) (6,077) Increase (decrease) in cash (1,140) (5,107) 2,489 Cash balance at beginning of year 11,293 16,400 13,911 Cash balance at end of year 16,400 b. $ 10,153 $ 11,293 $ Cash from operations has been consistently strong over the three­year period. H­P uses this cash flow to invest in its growing business (negative cash from investing activities in all three years) and is still able to return cash to shareholders and repay any debt (negative cash from financing activities in all three years). The company’s strong cash flow from operations allows it to continue to fund its growth and to return cash to the sources of funding (debt and equity providers). P14–8 a. Case 1: Based on the $820,000 beginning balance in the Buildings account and the purchase during 2012 of a building for $60,000, one would expect the Buildings account to have a balance of $880,000 at the end of 2012. The fact that its balance is only $750,000 implies that Webb Industries must have sold a building that originally cost $130,000. Similarly, based on the beginning balance of $80,000 in the Accumulated Depreciation: Buildings account and the $40,000 of depreciation taken on the building during 2012, one would expect the Accumulated Depreciation: Buildings account to have a balance of $120,000 at the end of 2012. The fact that its balance is only $100,000 implies that the accumulated depreciation associated with the building that Webb Industries sold during 2012 must have been $20,000. This information is summarized in the following T accounts. B.B. 80,000 Purchase Exp. E.B. Buildings 820,000 60,000 40,000 750,000 Accumulated Depreciation B.B. Sale X Sa...
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This homework help was uploaded on 03/03/2014 for the course ACCT 5053 taught by Professor Staff during the Fall '08 term at Oklahoma State.

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