## FA Mod 6 Cash flow indirect method practice exam questions

 Author Message NEAS Supreme Being         Group: Administrators Posts: 4.2K, Visits: 1.2K FA Module 6 Cash flow indirect method practice exam questions(The attached PDF file has better formatting.)A firm’s financial statements show the following amounts:    Calendar Year 20XX-1    Calendar Year 20XXCost of goods sold     438    416Net revenue     823    869Depreciation expense    77    87Net income    251    287    December 31, 20XX-1    December 31, 20XXAccounts receivable     183    140Inventory         119    182Accounts payable     173    14360% of the firm’s sales are on credit. The current accounts on the balance sheet are cash and marketable securities, accounts receivable, accounts payable, and inventory.Question 6.2: Receivables turnover What is the receivables turnover for 20XX? Answer 6.2: (869 × 60%) / ( (183 + 140) / 2) = 3.228(receivables turnover = credit sales / average accounts receivable)Question 6.3: Cash received from customersWhat is the cash received from customers in 20XX?Answer 6.3: 869 – (140 – 183) = 912(cash received from customers = net revenue – Δ(accounts receivable) )Question 6.4: Gross profit marginWhat is the gross profit margin for 20XX?Answer 6.4: 1 – 416 / 869 = 52.13%(gross profit margin = 1 – cost of goods sold / net revenue)Question 6.5: Inventory turnoverWhat is the inventory turnover for 20XX?Answer 6.5: 416 / ( (119 + 182) / 2) = 2.764(inventory turnover = cost of goods sold / average inventory)Question 6.6: Inventory boughtWhat is the inventory bought in 20XX?Answer 6.6: 416 + (182 – 119) = 479(inventory bought = cost of goods sold + Δ(inventory) )Question 6.7: Cash paid to suppliersWhat is the cash paid to suppliers in 20XX?Answer 6.7: 479 – (143 – 173) = 509(cash paid to suppliers = inventory bought – Δ(accounts payable) )Question 6.8: Payables turnover What is the payables turnover for 20XX?Answer 6.8: 479 / ( (173 + 143) / 2) = 3.032(payables turnover = inventory bought / average accounts payable)Question 6.9: Operating cash flowWhat is the operating cash flow for 20XX? (Assume shareholder dividends are a financing cash flow.) Answer 6.9: 287 + (912 – 869) + (416 – 509) + 87 = 324(operating cash flow = net income + (cash received from customers – net revenue) + (cost of goods sold – cash paid to suppliers) + depreciation expense)Question 6.10: Retained earningsWhat is the change in retained earnings during 20XX?Answer 6.10: 287 – 58 = 229(Δ(retained earnings) = net income – shareholder dividends) Attachments FA Module 6 Cash flow indirect method practice exam questions.pdf (161 views, 36.00 KB)
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