How much cash did White Flag pay in salaries?
Salaries paid = Beginning balance - Ending balance + Salaries expense
Salaries paid = 3 - 1 + 20 = 22 million
Under which section of a manufacturing company’s cash flow statement are purchases of securities held for trading reported?
Both items are operating activities
What is an appropriate method of computing free cash flow to the firm?
Add operating cash flows to after-tax interest payments and deduct capital expenditures
How much cash did Green Glory Corp. pay to its suppliers?
Cash paid to suppliers = COGS + Inventory - Accounts Payable
Cash Paid = 80 + 5 - 2 = 83
Which component of the cash flow statement may be prepared under the indirect method under both IFRS and US GAAP?
Operating
The sale of a building for cash would be classified as what type of activity on the cash flow statement?
Investing
How is a non-cash transaction affecting property, plant, and equipment disclosed?
Disclosed as a separate note or in a supplementary schedule to the cash flow statement
What is an example of a financing activity on the cash flow statement under US GAAP?
Payment of dividends
What is an appropriate method of preparing a common-size cash flow statement?
Show each line item of revenue and expense as a percentage of net revenue
What was the company’s 2018 cash flow from operations?
CFO = 35 + 25 - 5 - 3 - 7
CFO = 45
How much cash did Purple Fleur S.A. pay to its suppliers?
67
What are the total net adjustments that Star Inc. would make to net income to derive operating cash flow?
Add $6 million
How is the conversion of a convertible bond for common stock reported?
Reported as supplementary information to the cash flow statement
What occurs when there is a decrease in a deferred tax liability while computing net cash flow from operating activities?
An addition to net income is most likely to occur
What are the three major classifications of activities in a cash flow statement?
Operating, investing, and financing
How much cash did Golden Cumulus Corp. pay for interest and taxes?
Cash paid for interest = 19 - 3 = 16
Tax expense = 6, taxes payable decrease by 4 -> add 4
Total cash paid = 16 + 10
16 million for interest and 10 million for taxes
Where must cash flows from taxes on income be separately disclosed?
IFRS only
What should be the first step in cash flow statement analysis?
Identify the major sources and uses of cash
How is interest paid classified under US GAAP and IFRS?
US GAAP may be classified as either operating or financing cash flows under IFRS
What does the interest coverage ratio measure?
It measures a company’s ability to meet its interest obligations and indicates a company’s solvency
How much cash did Red Road Company receive from customers?
Cash received from customers = Total Revenues - Increase in Accounts Receivable
100 - 10 = $90
How much cash did Silverago Incorporated receive from the equipment sale?
1 million
What should Jaderong Plinkett Stores report in the financing section of the statement of cash flows in 2018?
Dividends paid = Net income - change in retained earnings
= 25 - 15 = 10
Issuance of common stock of $42 million; dividends paid for $10 million
