Activity 1 OPERATING ACTIVITIF s Purpose: ? Understand operating activities on the statement of cash flows. Q.
Question:
Activity 1 OPERATING ACTIVITIF s
Purpose: ? Understand operating activities on the statement of cash flows.
Q. l Operating activities include cash transaction that primarily affect (rarest asset / long-term asset/ Current liability / long-term liability / stockholders' equity) accounts. (Circle all that apply)
Q. 2 Identify transactions recorded in the operating section al the statement of cash flows.
(Operating / Not) a. Receive cash from customers paying on account.
(Operating / Not) b. Pay rent for the nest accounting period.
(Operating / NOt) c. Receive the utility bill for this accounting period that will be paid next accounting period.
(Operating / Not) d. Extend $100,000 of credit to Supplier Barry for a purchase.
(Operating / Not) e. Receive interest payment of $8,000 from Supplier Barry.
(Operating / Not) I. Supplier Barry pays off the $100,000.
The operating activity section on the face of the statement of cash flows can be reported using the direct or the indirect method. The direct method reports sources and uses of cash during the accounting period. The Indirect method reconciles accrual-based "Net Income" to cash-based "Net Cash from Operating Activities."
Refer to the Information immediately above to answer he following questions.
Q.3 Cash Rows from operating activities is reported using the (direct / Indirect) method.
Q.4 The strongest year for LUV was (2011/ 2010/ 2009). Why?
Q.5 The weokest year tor LUV was 12011/ 2010/ 2009). Why?
Q.6 LUV operates all (Boeing /Airbus / Raytheon) aircraft. Why?
(Hint Refer to company desaiptions In Appendix A?Featured Corporations)
Activity 2. Analysis of Dine Equity
Purpose: ? Understand and interpret amounts reported on the statement of cash flows:
Q.1 In Year 8 the primary source of cash is (operating / investing / financing) activities, which typically indicates a (strong / weak) cash position.
Q.2 In Year 8, DineEquity purchased property and equipment for $________thousand in cash and sold property and equipment for $_________ thousand in cash. Therefore, the company (purchased / sold) more property and equipment, which could indicate this business is (expanding / down-sizing).
Q.3 DineEquity acquired Applebee's in Year (9/ 8 / 7).
How much did the company pay to acquire Applebee's? $_________ thousand.
This acquisition was primarily financed by (operating cash flow / the issuance of debt / the Issuance of stock).
Q.4 DineEquity borrowed more long-term debt than it repaid during Year (9 / 8 / it, . assumption of (more / less) financial risk.
Q.5 DineEquity issued preferred stock during Year (9/ 8/ 7).
Q.6 DineEqurty purchased treasury stock during Year (9 / 8 / 7).
This Is generally considered (favorable / unfavorable) to stockholders. Why?
Q.7 DineEquity reissued treasury stock during Year (9 / 8 / 7).
Q.8 DineEquity (dues/ does not) pay dividends.
Q/9 In Year 8, DineEquity reported (Net income / a Net loss) of $________thousand. However, the company reported cash (Inflows / outflows) from operations. This disparity was primarily caused by (Depredation and amortization / Payment of dividends / Impairment and closure charges). (Circle all that apply)
Q.10 At December 31, Year 9, DineEquity had $________thousand In cash and cash equivalents.
Q.11 DineEquity reports a (strengthening / weakening) cash position. How con you tell? Support your response with at least five observations.
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso