Consider three independent cases for the cash flows of Winter Merchandising Corporation. For each case, identify from
Question:
Consider three independent cases for the cash flows of Winter Merchandising Corporation. For each case, identify from the statement of cash flows how the company generated the cash to acquire new plant assets. Rank the three cases from the most healthy financially to the least healthy.
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A1 Case B Case C Case A 2 Cash flows from operating activities: Net income $ 25,000 11,000 (27,000) (12,000) (3,000) $ 25,000 11,000 (2,000) (5,000) 29,000 $ 25,000 11,000 |(14,000) (1,000) 21,000 3 Depreciation and amortization 4 Increase in current assets other than cash 5 Decrease in current liabilities Cash flows from investing activities: Acquisition of plant assets 10 8 (102,000) 11,000 (91,000) (102,000) 46,000 (56,000) (102,000) 111,000 9,000 Sales of plant assets 11 12 Cash flows from financing activities: Issuance of stock 13 119,000 (27,000) 92,000 (2,000) 76,000 |(47,000) 29,000 $ 2,000 18,000 (28,000) (10,000) $ 20,000 Payment of debt 15 16 Net increase (decrease) in cash 17 14
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Related Book For
Financial Accounting
ISBN: 978-0134725987
12th edition
Authors: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
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