FA Module 6: Articulation of income statement, balance sheet, cash flow statement – homework assignment
(The attached PDF file has better formatting.)
Homework assignment: Forming the cash flow statement: income vs cash flows
The homework assignment for this module is patterned on the ACME Corporation example in the textbook and the practice problems on the discussion forum. The final exam problems test pieces of this exercise.
A firm’s income statement and balance sheets show the following entries:
Calendar Year 20X1 Calendar Year 20X2
Net revenue 270 275
Cost of goods sold 145 150
Wage expense 37 40
Depreciation expense 12 15
Other operating expenses 28 30
Gain (loss) on sale of equipment -8 5
Interest expense 4 4
Tax expense 10 12
December 31, 20X1 December 31, 20X2
Cash and marketable securities 20 ?
Accounts receivable 10 12
Prepaid expenses 2 1
Land 15 15
Buildings 30 30
Equipment 84 87
Accumulated depreciation 30 35
Accounts payable 32 35
Wages payable 4 6
Interest payable 6 4
Taxes payable 4 5
Other accrued liabilities 10 12
Long-term debt 36 31
Common stock + additional paid-in capital 44 38
Retained earnings 30 40
The questions below refer to 20X2 income statement items and the change from 12/31/20X1 to 12/31/20X2 for balance sheet items.
A. What is the change in accounts receivable?
B. What is the cash received from customers?
C. What is the change in inventory?
D. What are the purchases from suppliers?
E. What is the change in accounts payable?
F. What is the cash paid to suppliers?
G. What is the change in wages payable?
H. What are the cash paid to employees?
I. What is the change in interest payable?
J. What is the cash interest paid?
K. What is the change in taxes payable?
L. What is are the taxes paid?
M. What is the change in the accrued liability for other operating expenses?
N. What is the change in prepaid expenses?
O. What is the cash paid for other operating expenses?
P. What is the gross profit?
Q. What are total operating expenses?
R. What is the operating profit (operating income)?
S. What is pre-tax income?
T. What is net income?
U. What is the change in retained earnings?
V. What are shareholder dividends?