Chapter4: PATIRCK DARDAS
1. Refer to the below table and calculate the CFO ( Using the indirect method):
Net income= 200,000 $
Depreciation= 30,000 $
AR 2014 = 60,000 $
AR 2015 = 100,000 $
AP 2014 = 80,000 $
AP 2015 = 110,000 $
CFO = NI +DEP =230K
CFO = NI –AR = 160K
CFO = NI + AP = 230K
2. Refer to the below table and calculate the CFO ( Using the indirect method):
Net income= 200,000 $
Prepaid exp. 2014 = 80,000$
Prepaid exp. 2015 =
110,000 $
Accruals 2014 = 70,000 $
Accruals 2015 = 90,000 $
CFO = NI -PREPAID EXP =230K
CFO = NI + ACCURALS =220K
3. Refer to the below table and calculate the CFO ( Using the indirect method):
Net income= 200,000 $
Inventory. 2014 = 40,000 $
Inventory. 2015 = 70,000 $
Accruals 2014 = 120,000 $
Accruals 2015 = 90,000 $
AP 2014 = 80,000 $
AP 2015 = 110,000 $
CFO = NI – IENVENTORY = 170K
CFO = NI – ACCRALS = 170K
CFO = NI + AP = 230K
4. For the year ended December 31, 2008, a corporation had cash flow from operating activities
of $20,000, cash flow from investment activities of -$15,000, and cash flow from financing
activities of -$10,000. Calculate the Cash Flows.
CASH FLOW = CFO + CFI + CFF = 20K -15K -10 = -5K
5. The Big and Fast company provides the following information about its activities in the year
2016.
● Investments in other companies: $45,000 CFO ● Treasury stock purchased: $56,000 CFO ● Inventory purchased: $412,000 CFI ● Land sold: $95,000 CFI +
● Machinery purchased: $278,000 CFI ● Common stock issued: $168,000 CFF +
Compute net cash provided/used by investing activities to be reported in the statement of cash
flows of Big and Fast company.
11. The Delta company uses indirect method to prepare its statement of cash flows. The list of
various activities performed by the company during the year 2014 is given below:
1. Purchase of available for sale investment CFO 2. Sale of equipment CFI +
3. Increase in accounts payable CFO +
4. Retirement of bonds CFF 5. Issuance of bonds CFF+
6. Decrease in accounts payable CFO 7. Increase in inventory CFO 8. Proceeds of Loan from bank CFF +
9. Increase in accounts receivable CFO 10. Purchase of equipment CFI Explain the effect of each activity on the statement of cash flows of the Delta company for the
year 2014.