Financial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780134728520
Author: Robert Kemp, Jeffrey Waybright
Publisher: PEARSON
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Question
Chapter 11, Problem 1IA
Requirement 1
To determine
Ascertain whether direct or indirect method is used to prepare the statement of cash flows by these Companies with explanation.
Requirement 2
To determine
Find out the activities that provide cash for each of the Companies for each of these years.
To determine
Find out the activities that use cash for each of the Companies for each of these years.
To determine
Explain the conclusion that can be drawn from these results.
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Required information
[The following information applies to the questions displayed below.]
Consider the following balance sheet and income statement for Mmm Good Foods Incorporated
(the company that operates Tasty Fried Chicken and Pizza Party), in condensed form, including
some information from the cash flow statement: (amounts are millions)
Balance Sheet
Cash and short-term investments
Accounts receivable
Inventory
Other current assets
Long-lived assets
Total assets
Current liabilities
Total liabilities
Shareholders' equity
Total liabilities and equity
Income Statement
Sales
Cost of sales
Gross margin
Earnings before interest and taxes
Interest
Taxes
Net income
Share price
Earnings per share
Number of outstanding shares (millions)
Cash Flows
Cash flow from operations
Capital expenditures
Dividends
Mmm Good Foods Incorporated
2019
2018
$743
623
$ 443
597
161
3,704
$ 5,231
$ 1,541
13, 247
(8,016)
$ 5,231
$ 5,597
1,235
$ 4,362
$ 1,859
486
79
$ 1,294
$ 102
4.23
300
$ 1,315
196
511
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Assessment task:Part AReview the existing literature to critically examine the relative information content of theincome statement and the statement of cash flows. Why do investors find both incomestatement and statement of cash flows useful?Part BDownload the annual financial reports of BHP Ltd, Santos Ltd, and Funtastic Ltd for the year2019, 2018 and 2017. Examine the consolidated Cash Flow Statements for each companiesacross three years. Answer the following questions about each of the three cash-flowstatements.1. For each companies [except mentioned otherwise as in c), g) and i) below], across threeyears on the Statement of Cash Flows discuss:a) What are the major sources of cash for each firm? What are the major uses ofcash for each firm?b) What was the trend in cash flow from (continuing) operations for each firm?c) Compare and contrast the cash flow from operations with the net profit after taxin income statement. Explain in detail the major reasons for the differencebetween…
Chapter 11 Solutions
Financial Accounting, Student Value Edition (5th Edition)
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - Prob. 3DQCh. 11 - A company issued bonds during the year. Would this...Ch. 11 - Prob. 5DQCh. 11 - When using the indirect method, why are gains on...Ch. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - Prob. 9DQCh. 11 - Prob. 10DQ
Ch. 11 - Prob. 1SCCh. 11 - Operating activities are most closely related to:...Ch. 11 - Prob. 3SCCh. 11 - Prob. 4SCCh. 11 - Finlay, Inc., earned net income of 63,000 after...Ch. 11 - Prob. 6SCCh. 11 - Prob. 7SCCh. 11 - Prob. 8SCCh. 11 - Prob. 9SCCh. 11 - Elliot Enterprises had operating expenses of...Ch. 11 - Prob. 11SCCh. 11 - Prob. 12SCCh. 11 - Prob. 1SECh. 11 - Prob. 2SECh. 11 - Prob. 3SECh. 11 - Prob. 4SECh. 11 - Prob. 5SECh. 11 - Prob. 6SECh. 11 - Operating activitiesindirect method (Learning...Ch. 11 - Prob. 8SECh. 11 - Operating activitiesdirect method (Learning...Ch. 11 - Prob. 10SECh. 11 - Prob. 11SECh. 11 - Prob. 12SECh. 11 - Prob. 13AECh. 11 - Prob. 14AECh. 11 - Prob. 15AECh. 11 - Preparing a statement of cash flowsindirect method...Ch. 11 - Prob. 17AECh. 11 - Prob. 18AECh. 11 - Prob. 19AECh. 11 - Prob. 20AECh. 11 - Prob. 21AECh. 11 - Prob. 22BECh. 11 - Prob. 23BECh. 11 - Preparing a statement of cash flowsindirect method...Ch. 11 - Prob. 25BECh. 11 - Prob. 26BECh. 11 - Prob. 27BECh. 11 - Prob. 28BECh. 11 - Prob. 29BECh. 11 - Calculating certain information using the direct...Ch. 11 - Prob. 31APCh. 11 - Prob. 32APCh. 11 - Prob. 33APCh. 11 - Prob. 34APCh. 11 - Prob. 35APCh. 11 - Prob. 36APCh. 11 - Prob. 37BPCh. 11 - Prob. 38BPCh. 11 - Prob. 39BPCh. 11 - Prob. 40BPCh. 11 - Prob. 41BPCh. 11 - Prob. 42BPCh. 11 - Prob. 1CECh. 11 - Prob. 1CPCh. 11 - Apply Your Knowledge Ethics In Action Case 1....Ch. 11 - Case 2. Kevin Sailors, the CEO of Candle...Ch. 11 - Financial Analysis Purpose: To help to familiarize...Ch. 11 - Prob. 1IACh. 11 - Small Business Analysis Purpose: To help you...Ch. 11 - Written Communication Prepare a paper outlining...Ch. 11 - Comprehensive Problem The Accounting Cycle and...
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