Chapter 12: Q13DQ (page 565)
Refer to Google’s statement of cash flows in Appendix A. What are its cash flows from financing activities for the year ended December 31, 2015? List the items and amounts.
The cash from financing activities is -$3,677 millionand items are listed in step 2
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
BTN 12-7 Review the chapter’s opener involving Amazon.com and its founder, Jeff Bezos.
Required
1. In a business such as Amazon, monitoring cash flow is always a priority. Even though Amazon now has billions in annual sales and sometimes earns a positive net income, explain how cash flow can lag behind net income.
2. Amazon is a publicly traded corporation. What are potential sources of financing for its future expansion?
Refer to Samsung’s 2015 statement of cash flows in Appendix A. List its cash flows from operating activities, investing activities, and financing activities.
What are some investing activities reported on the statement of cash flows?
A company reported average total assets of \(1,240,000 in 2016 and \)1,510,000 in 2017. Its net operating cash flow was \(102,920 in 2016 and \)138,920 in 2017. Calculate its cash flow on total assets ratio for both years. Comment on the results and any change in performance.
Golden Corp., a merchandiser, recently completed its 2017 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow.
| GOLDEN CORPORATION Comparative Balance Sheets December 31, 2017 and 2016 |
2017 | 2016 |
Assets: | ||
Cash | \(164,000 | \)107,000 |
Accounts receivables | 83,000 | 71,000 |
Inventory | 601,000 | 526,000 |
Total current assets | 848,000 | 704,000 |
Equipment | 335,000 | 299,000 |
Accumulated depreciation | (158,000) | (104,000) |
Total assets | \(1,025,000 | \)899,000 |
Liability and equity | ||
Account payable | \(87,000 | \)71,000 |
Income tax payable | 28,000 | 25,000 |
Total current liabilities | 115,000 | 96,000 |
Equity | ||
Common stock, \(2 par value | 592,000 | 568,000 |
Paid-in-capital in excess of par value, common stock | 196,000 | 160,000 |
Retained earnings | 122,000 | 75,000 |
Total liabilities and equity | \)1,025,000 | \(899,000 |
GOLDEN CORPORATION Income Statement For Year Ended December 31, 2017 |
Sales | \)1,792,000 | |
Cost of goods sold | (1,086,000) | |
Gross profit | 706,000 | |
Operating expenses | ||
Depreciation expenses | \(54,000 | |
Other expenses | 494,000 | (548,000) |
Income before taxes | 158,000 | |
Income tax expenses | (22,000) | |
Net income | \)136,000 |
Additional Information on Year 2017 Transactions
a. Purchased equipment for \(36,000 cash.
b. Issued 12,000 shares of common stock for \)5 cash per share.
c. Declared and paid $89,000 in cash dividends.
Required
Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.
What do you think about this solution?
We value your feedback to improve our textbook solutions.
