The accountant for Lang Company, Samuel Pascal, presented the statement of cash flows to the president...

  

Transcribed Image Text:

The accountant for Lang Company, Samuel Pascal, presented the statement of cash flows to the president of the company, Roland Lang. This is the second year of the company's operation. Lang Company's accountant says that the statement is an excellent portrayal of how a company with good leadership can successfully perform during its second year of operation. Roland Lang, however, was not really satisfied with the results of the first year of operation and feels the same about the second year. While the accountant is reporting an increase of cash by $105,000, Roland has doubts that the statement is accurate and that cash really increased by $105,000. The company began the second year with about $140,000 Roland, a former business associate of yours, asked you to evaluate the cash flow statement that he was presented. He knows that you have experience in financial statement preparation and analysis. Should he be pleased based on what the accountant says or is Roland Lang correct in being skeptical about the second year' results? You decided to prepare the statement again, based on the information provided on the accountant's statement below. own work, do you agree with the accountant or with Roland Lang, President? Based on your In addition to re-doing the cash flow statement, write a brief memo to Roland Lang that briefly expresses your opinion about the statement. Should Mr. Lang be happy with the second year 's operations, as indicated by the accountants' work? Lang Company Statement of Cash Flows For the Year Ended December 31, 2016 Sources of Cash: Sale of merchandise Sale of Stock Sale of investments From depreciation Issuance of note for a printer machine Interest on investments 470,000 420,000 80,000 75,000 30,000 6.000 69% Mo istory Bookmarks Develop n blackboard.ncat.edu Why is the stateme X Cash Flows Prom Ope Take Testi MODULE FIVE ASSESSMENT: M5-Ch.. Be Caic Remaining Time: 2 hours, 11 minutes, 40 seconds. * Question Completion Status: In addition to re-doing the cash flow statement, write a brief memo to Roland Lang that briefly expresses your opinion a statement. Should Mr. Lang be happy with the second year 's operations, as indicated by the accountants' work? Lang Company Statement of Cash Flows For the Year Ended December 31, 2016 Sources of Cash: Sale of merchandise Sale of Stock Sale of investments From depreciation Issuance of note for a printer machine Interest on investments 470,000 420,000 80,000 75,000 30,000 6,000 Total sources of cash $1.081.000 Uses of Cash: Purchase of furniture and machines Merchandise inventory for sale Operating expenses (including depreciation) Purchase of investments Purchase of Computer Equipment by issuing a note Purchased treasury stock Interest on notes $ 420,000 268,000 180,000 75,000 20,000 10,000 3,000 Total uses of cash $4976.000 INCREASE IN CASH $ 105.000 T TTArial 3 (12pt) eT E E MacBook Pro 20 F3 44 F7 F4 F6 F8 F10 F11 & 6. 8 9. 5 224 %#3 The accountant for Lang Company, Samuel Pascal, presented the statement of cash flows to the president of the company, Roland Lang. This is the second year of the company's operation. Lang Company's accountant says that the statement is an excellent portrayal of how a company with good leadership can successfully perform during its second year of operation. Roland Lang, however, was not really satisfied with the results of the first year of operation and feels the same about the second year. While the accountant is reporting an increase of cash by $105,000, Roland has doubts that the statement is accurate and that cash really increased by $105,000. The company began the second year with about $140,000 Roland, a former business associate of yours, asked you to evaluate the cash flow statement that he was presented. He knows that you have experience in financial statement preparation and analysis. Should he be pleased based on what the accountant says or is Roland Lang correct in being skeptical about the second year' results? You decided to prepare the statement again, based on the information provided on the accountant's statement below. own work, do you agree with the accountant or with Roland Lang, President? Based on your In addition to re-doing the cash flow statement, write a brief memo to Roland Lang that briefly expresses your opinion about the statement. Should Mr. Lang be happy with the second year 's operations, as indicated by the accountants' work? Lang Company Statement of Cash Flows For the Year Ended December 31, 2016 Sources of Cash: Sale of merchandise Sale of Stock Sale of investments From depreciation Issuance of note for a printer machine Interest on investments 470,000 420,000 80,000 75,000 30,000 6.000 69% Mo istory Bookmarks Develop n blackboard.ncat.edu Why is the stateme X Cash Flows Prom Ope Take Testi MODULE FIVE ASSESSMENT: M5-Ch.. Be Caic Remaining Time: 2 hours, 11 minutes, 40 seconds. * Question Completion Status: In addition to re-doing the cash flow statement, write a brief memo to Roland Lang that briefly expresses your opinion a statement. Should Mr. Lang be happy with the second year 's operations, as indicated by the accountants' work? Lang Company Statement of Cash Flows For the Year Ended December 31, 2016 Sources of Cash: Sale of merchandise Sale of Stock Sale of investments From depreciation Issuance of note for a printer machine Interest on investments 470,000 420,000 80,000 75,000 30,000 6,000 Total sources of cash $1.081.000 Uses of Cash: Purchase of furniture and machines Merchandise inventory for sale Operating expenses (including depreciation) Purchase of investments Purchase of Computer Equipment by issuing a note Purchased treasury stock Interest on notes $ 420,000 268,000 180,000 75,000 20,000 10,000 3,000 Total uses of cash $4976.000 INCREASE IN CASH $ 105.000 T TTArial 3 (12pt) eT E E MacBook Pro 20 F3 44 F7 F4 F6 F8 F10 F11 & 6. 8 9. 5 224 %#3

Answer rating: 100% (QA)

Lang Company Statement of cash flow For the year ended december ... View the full answer