Eagle Corporation’s current Income Statement and the last two years of Balance Sheet are listed below for
the year ending December 31. Prepare the full Statement of Cash flows using the direct method. Then
show the operating activities using the indirect method.
Income Statement 2009 Balance Sheets 2009 2008
Sales $345 Cash $ 82 $ 40
Expenses: Accounts Receivable 180 150
Cost of Goods Sold $120 Inventory 170 200
Operating Expenses 58 Equipment 200 140
Depreciation Expense 20 Accum. Depreciation (72) (60)
Interest Expense 2 200 Total Assets $560 $470
Operating Income 145
Gain on Sale–Equip. 5 Accounts Payable $100 $ 80
Income before Taxes 150 L/T Notes Payable 100 50
Tax Expense 30 Common Stock 250 250
Net Income $120 Retained Earnings 110 90
Total Liabilities &
Stockholder Equity $560 $470
Eagle Corp. sold equipment for $57 which had a cost of $60.
During 2010, Delivery Systems Incorporated net cash provided by operating activities of $1,200,000,
capital expenditures of $540,000, dividends of $260,000, and average maturities of long-term debt over
the next five years of $650,000.
- A) Compute Delivery Systems Incorporated free cash flow for 2010.
- B) Compute Delivery Systems Incorporated cash flow adequacy ratio for 2010.
Selected data from the financial statements of Cabo Corporation for the years ended
December 31, 2009 and 2010, are presented below.
(In thousands) 2010 2009Cash and cash equivalents $ ? $ 4,500
Total current assets (except cash) 180,000 150,000
Income taxes paid 5,000 2,000
Interest paid 5,100 7,200
Net cash provided by operating activities 9,500 6,400
Net cash used by investing activities 5,100 6,300
Net cash provided by financing activities 1,500 7,400
Depreciation and amortization 7,000 5,000
Total stockholders’ equity 115,000 105,000
Net income 4,000 2,000
- Refer to Cabo Corp. What is the amount of cash and cash equivalents at the end of
Selected data and additional information from the records of King Corporation
are presented below.
Balance Sheet Data 2012 2011
Accounts receivable $132,000 $165,000
Inventories 61,600 55,000
Accounts payable 41,800 77,000
Salaries payable 11,000 5,500
Equipment 121,000 77,000
Accumulated depreciation 30,800 35,200
Bonds payable 110,000 220,000
Common stock 330,000 220,000
Retained earnings 83,600 44,000
Income Statement Data 2012
Net sales $1,000,000
Cost of goods sold 700,000
Operating expenses (Excluding depreciation
Net income (Includes depreciation expense and
Gain on sale of equipment 6,000
- Equipment with a cost of $45,000 and a book value of $22,000 was sold
for $28,000 during 2012.
- Common stock was issued to retire bonds payable during 2012.3. The only items affecting retained earnings in 2012 were net income and
dividends declared and paid.
- a. Refer to the information provided for King Corporation, how would the
transaction to retire bonds by issuing common stock be reported on the
statement of cash flows for 2012 for King Corporation?
- b. Refer to the information provided for King Corporation, what amount of cash
was received from customers during 2012?
- c. Refer to the information provided for King Corporation, what is the amount
paid to suppliers for purchases of inventory during 2012?
- d. Refer to information provided for King Corporation, what is the amount paid
for operating expenses during 2012?
- e. Prepare the operating activities section of the statement of cash flows for
King Corporation for 2012 if the direct method is used to determine net cash
flow from operating activities.
- f. Prepare the operating activities section of a statement of cash flows for King
Corporation for 2012 if the indirect method is used.
- g. Prepare the investing activities section of a statement of cash flows for 2012
for King Corporation.
- Prepare the financing activities section of a statement of cash flows for 2012
for King Corporation.