Professional Documents
Culture Documents
Short Exercises
a. 1. Operating
2. Investing
3. Financing
4. Noncash investing and financing activities
c. Net income
Street Cellular
Statement of Cash Flows (partial)
Year ended June 30, 2012
Cash flows from operating activities:
Net income $64,000
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation $ 19,000
Increase in current assets other than cash (13,000)
Decrease in current liabilities (7,000) (1,000)
Net cash provided by operating activities $63,000
Street Cellular
Statement of Cash Flows
Year ended June 30, 2012
Cash flows from operating activities:
Net income $64,000
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation $ 19,000
Increase in current assets other than
cash (13,000)
Decrease in current liabilities (7,000) (1,000)
Net cash provided by operating activities 63,000
Acquisitions = $14,000
X = $14,000
Equipment, Net
Beginning 68,000 Depreciation 6,000
Acquisitions 14,000
Ending 76,000
Req. 2
Payment = $14,000
X = $8,100
(5 min.) S 13-10
Req. 1
Req. 2
Assuming all other things are equal, the cash flow should be
about the same as the previous year.
Req. 2
X = $43,000
Retained Earnings
Beginning 48,000
Cash dividends 43,000 Net income 64,000
Ending 69,000
Req. 2
Cash receipt = Book value of asset sold, $3,000
+ Gain on sale, $4,000
= $7,000*
X = $7,000
X = $89,000
Beginning Ending
Net
retained + − Dividends = retained
income
earnings earnings
X = $52,000
Retained Earnings
Beginning 234,000
Dividends 52,000 Net income 109,000
Ending 291,000
Req. 2
Evaluation:
Operations are generating cash.
The company is investing in new plant assets.
There is more financing by issuing stock than by
borrowing.
Cash increased during the year.
For the reasons given above, this company’s cash
flows look strong.
Req. 2
Evaluation:
Operations are generating cash.
The company is investing in new plant assets.
There is more financing by issuing stock than by
borrowing.
Cash increased during the year.
For the reasons given above, this company’s cash
flows look strong.