COMPUTE and interpret Wolff's a. THE OPERATING CASH FLOWS to CURRENT LIABILIRTIES RATIO AND b. OPERATING CASH
Fantastic news! We've Found the answer you've been seeking!
Question:
COMPUTE and interpret Wolff's
a. THE OPERATING CASH FLOWS to CURRENT LIABILIRTIES RATIO AND
b. OPERATING CASH FLOW TO Capital expenditure RATIO
Transcribed Image Text:
Preparing a Statement of Cash Flows (Indirect Method) Wolff Company's income statement and comparative balance sheets follow. Sales. Cost of goods sold Wages expense Insurance expense. Depreciation expense. Interest expense. Income tax expense. Net income. Assets Cash. Accounts receivable Inventory. Prepaid insurance. Plant assets Accumulated depreciation Total assets.. Liabilities and Stockholders' Equity Accounts payable.. Wages payable.. Income tax payable.. WOLFF COMPANY Income Statement For Year Ended December 31, Year 5 Bonds payable. Common stock Retained earnings Total liabilities and equity WOLFF COMPANY Balance Sheets $516,000 103,200 9,600 20,400 10,800 34,800 $ 13,200 49,200 108,000 6,000 300,000 (81,600) $394,800 $ Dec. 31 Year 5 Dec. 31 Year 4 10,800 8,400 $762,000 156,000 108,000 103,200 $394,800 694,800 $ 67,200 $ 6,000 38,400 72,000 8,400 234,000 (61,200) $297,600 $ 12,000 7,200 9,600 90,000 108,000 70,800 $297,600 Cash dividends of $34,800 were declared and paid during Year 5. Also in Year 5, plant assets were purchased for cash, and bonds payable were issued for cash. Bond interest is paid semiannually on June 30 and December 31. Accounts payable relate to merchandise purchases. Preparing a Statement of Cash Flows (Indirect Method) Wolff Company's income statement and comparative balance sheets follow. Sales. Cost of goods sold Wages expense Insurance expense. Depreciation expense. Interest expense. Income tax expense. Net income. Assets Cash. Accounts receivable Inventory. Prepaid insurance. Plant assets Accumulated depreciation Total assets.. Liabilities and Stockholders' Equity Accounts payable.. Wages payable.. Income tax payable.. WOLFF COMPANY Income Statement For Year Ended December 31, Year 5 Bonds payable. Common stock Retained earnings Total liabilities and equity WOLFF COMPANY Balance Sheets $516,000 103,200 9,600 20,400 10,800 34,800 $ 13,200 49,200 108,000 6,000 300,000 (81,600) $394,800 $ Dec. 31 Year 5 Dec. 31 Year 4 10,800 8,400 $762,000 156,000 108,000 103,200 $394,800 694,800 $ 67,200 $ 6,000 38,400 72,000 8,400 234,000 (61,200) $297,600 $ 12,000 7,200 9,600 90,000 108,000 70,800 $297,600 Cash dividends of $34,800 were declared and paid during Year 5. Also in Year 5, plant assets were purchased for cash, and bonds payable were issued for cash. Bond interest is paid semiannually on June 30 and December 31. Accounts payable relate to merchandise purchases.
Expert Answer:
Answer rating: 100% (QA)
a The Operating Cash Flows to Current Liabilities ratio can be computed as Operating Cash Flows Curr... View the full answer
Related Book For
Financial Statement Analysis
ISBN: 978-0078110962
11th edition
Authors: K. R. Subramanyam, John Wild
Posted Date:
Students also viewed these accounting questions
-
The unclassified statement of financial position accounts for Sorkin Corporation, which is a public company using IFRS, for the year ended December 31, 2016 and its statement of comprehensive income...
-
The unclassified balance sheet accounts for Sorkin Corporation, which is a public company using IFRS, for the year ended December 31, 2011, and its statement of comprehensive income and statement of...
-
The financial statements for Wilkerson Corporation follow. Additional information contained in the records revealed that equipment, having a cost of $ 37,600 and accumulated depreciation of $ 28,480,...
-
In Exercises use the Ratio Test to determine the convergence or divergence of the series. 00 n=1 n! n3n
-
List seven techniques for making ethical decisions across borders.
-
A vat has a sloped side, as shown in Fig. 4.27. Compute the resultant force on this side if the vat contains 15.5 ft of glycerin. Also compute the location of the center of pressure and show it on a...
-
Why should fixed assets be appraised periodically?
-
Rentz Corporation is investigating the optimal level of current assets for the coming year. Management expects sales to increase to approximately $2 million as a result of an asset expansion...
-
What would you say to a disruptive employee to turn them around and get them back on the right track. Also introduce the employees to the process of cash flow analysis, breakeven analysis, and return...
-
Compute the surface area of revolution about the x-axis over the interval. y=x-lnx, [1, e]
-
1. The following table gives some cost components for a perfectly competitive firm. Fill the table calculating the missing short-run costs. Calculate the profit-maximising output of the firm assuming...
-
Adriana buys three $300 television sets from Gail, paying with a check. That night, one of the sets explodes. Adriana phones City Bank, the drawee, and orders a stop payment. The next day, Gail...
-
Anton, an employee of Tango Fabrication, LLC, used stolen software and blank checks to print forged company checks on his home computer. Tangos checkhandling process lacked audit controls, so Tango...
-
Angus the sheep farmer sells wool to Barnaby the knitter for $20. Barnaby makes two sweaters, each of which has a market price of $40. Collette buys one of them, while the other remains on the shelf...
-
The worlds rich countries, such as the United States and Germany, have income per person that is about _____ times income per person in the worlds poor countries, such as Pakistan and India. a. 2 b....
-
Over the past century, real GDP per person in the United States has grown about _____ percent per year, meaning it has roughly doubled every _____ years. a. 2; 14 b. 2; 35 c. 5; 14 d. 5; 35
-
You are researching buying your first car and have found the following information.Use the information below to calculate how much owning the car will cost you over 5 years. (Note: Not all...
-
Chicago Company sold merchandise to a customer for $1,500 cash in a state with a 6% sales tax rate. The total amount of cash collected from the customer was $558. $600. $642. $636. Nevada Company...
-
Describe the effects of extraordinary items on: a. Company resources. b. Management evaluation.
-
Refer to the information in Exercise 13 about Mixon Company. The companys income statements for the years ended December 31, 2006 and 2005 show the following: Required: For the yearsendedDecember31,...
-
Reproduced below are selected financial data at the end of Year 5 and forecasts for the end of Year 6 for Top Corporation: Additional forecast estimates for Year 6: Sales. . . . . . . . . . . . . . ....
-
According to the monetary approach to the balance of payments, what type of economic policies would help a country resolve a balance of trade deficit?
-
We discussed risk aversion as being descriptive of investor behavior. Can Do you think of any real-world behavior that you might consider to be evidence of the existence of risk preferrers?
-
Pick three developing countries and create a country risk index for them. Rank them ordinally in terms of factors that you can observe (exports, GDP growth, reserves, etc.) by looking at...
Study smarter with the SolutionInn App