Required: 1) Prepare a funds flow statement using the working capital definition of funds. 2) Evaluate the
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Question:
- Required:
- 1) Prepare a funds flow statement using the working capital definition of funds.
- 2) Evaluate the changes in individual working capital accounts.
- 3) Prepare a funds flow statement using the cash definition of funds
- 4) Prepare Cash Flow Statement
Transcribed Image Text:
ASSETS Cash Accounts receivable Inventories Fixed assets, net Other assets Total assets Net sales Expenses 2019 P 5 15 12 50 8 P 90 North Corporation Balance Sheet December 31 (millions) 2020 P 3 Net income Add: Retained earnings at 1/1/2020 Subtotal Less: Dividends Retained earnings at 12/31/2020 Notes payable 22 Accounts payable 15 Accrued wages 55 Accrued taxes Long-term debt Common stock Retained earnings 5 LIABILITIES AND 2019 NET WORTH P 100 Cost of goods sold Selling, general, and administrative expenses Depreciation Interest Net income before taxes Less: Taxes North Corporation Statement of Income and Retained Eamings For Year Ended December 31, 2020 P 20 5 P Total liabilities and net worth P 90 25,000,000 5,000,000 5,000,000 2,000,000 23029 40 P P P 2020 P P ON 000 2 15 26 44 37,000,000 P 11,000,000 4,000,000 7,000,000 40,000,000 47,000,000 3,000,000 44,000,000 P 100 48,000,000 ASSETS Cash Accounts receivable Inventories Fixed assets, net Other assets Total assets Net sales Expenses 2019 P 5 15 12 50 8 P 90 North Corporation Balance Sheet December 31 (millions) 2020 P 3 Net income Add: Retained earnings at 1/1/2020 Subtotal Less: Dividends Retained earnings at 12/31/2020 Notes payable 22 Accounts payable 15 Accrued wages 55 Accrued taxes Long-term debt Common stock Retained earnings 5 LIABILITIES AND 2019 NET WORTH P 100 Cost of goods sold Selling, general, and administrative expenses Depreciation Interest Net income before taxes Less: Taxes North Corporation Statement of Income and Retained Eamings For Year Ended December 31, 2020 P 20 5 P Total liabilities and net worth P 90 25,000,000 5,000,000 5,000,000 2,000,000 23029 40 P P P 2020 P P ON 000 2 15 26 44 37,000,000 P 11,000,000 4,000,000 7,000,000 40,000,000 47,000,000 3,000,000 44,000,000 P 100 48,000,000
Expert Answer:
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To prepare the funds flow statement using the working capital definition of funds we need to analyze the changes in individual working capital accounts Lets start by calculating the changes in each ac... View the full answer
Related Book For
Auditing An International Approach
ISBN: 978-0071051415
6th edition
Authors: Wally J. Smieliauskas, Kathryn Bewley
Posted Date:
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