FIN 300 Chapter : FIN300 ch 3
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Which of the following would not be a source of funds?
| a. decrease in an equity account | ||
| b. increase in a liability account | ||
| c. decrease in an asset account | ||
| d. all the above are sources of funds |
Selected data for Kris Corporationâs comparative balance sheetsfor Year 1 and Year 2 are as follows:
| Year 1 | Year 2 | |||||||
| Assets | ||||||||
| Cash | $ | 100,000 | $ | (50,000) | ||||
| Accounts receivable (net) | 50,000 | 100,000 | ||||||
| Inventory | 100,000 | 250,000 | ||||||
| Equipment (net) | 300,000 | 350,000 | ||||||
| Total assets | $ | 550,000 | $ | 650,000 | ||||
| Liabilities and Equity | ||||||||
| Accounts payable | $ | 150,000 | 100,000 | |||||
| Income taxes payable | 80,000 | 30,000 | ||||||
| Bonds payable | 100,000 | 80,000 | ||||||
| Common stock | 100,000 | 200,000 | ||||||
| Retained earnings | 120,000 | 240,000 | ||||||
| Total liabilities and Equity | $ | 550,000 | $ | 650,000 | ||||
1. The change in the equipment balance would berecorded on the statement of cash flows as:
A) a decrease of $50,000 under investing activities.
B) an increase of $50,000 under investing activities.
C) a decrease of $150,000 under investing activities.
D) an increase of $150,000 under operating activities.
2. The change in the balance of the Bonds Payableaccount would be recorded on the statement of cash flowsas:
A) an increase of $20,000 under financing activities.
B) an increase of $80,000 under investing activities.
C) a decrease of $20,000 under financing activities.
D) a decrease of $80,000 under operating activities.
Using the table below, explain the difference between net income and cash flow from operating activities for Techno in 2009 and analyze their cash flows for 2008 and 2009.
| (in thousands) | 2009 | 2008 |
| Net income | $ 316,354 | $ 242,329 |
| Noncash charges (credits) to income | ||
| Depreciation and amortization | 68,156 | 62,591 |
| Deferred taxes | 15,394 | 22,814 |
| $ 399,904 | $ 327,734 | |
| Cash Provided (Used) by Operating Assets and Liabilities: | ||
| Receivables | (288,174) | (49,704) |
| Inventories | (159,419) | (145,554) |
| Other current assets | (1,470) | 3,832 |
| Accounts payable, accrued liabilities | 73,684 | 41,079 |
| Total Cash Provided by Operations | $ 24,525 | $ 177,387 |
| Investment activities | ||
| Additions to plant and equipment | (94,1760) | (93,136) |
| Other investment activities | 14,408 | (34,771) |
| Net investment activities | ($ 79,768) | ($ 127,907) |
| Financing activities | ||
| Purchases of treasury stock | (45,854) | (39,267) |
| Dividends paid | (49,290) | (22,523) |
| Net changes in short-term borrowing | 125,248 | 45,067 |
| Additions to long-term borrowings | 135,249 | 4,610 |
| Repayments of long-term borrowings | (250,564) | |
| Net financing activities | $ 165,353 | ($ 262,677) |
| Increase (decrease) in cash | $ 110,110 | ($ 213,197) |
| Beginning cash balance | 78,114 | 291,311 |
| Ending cash balance | $ 188,224 | $ 78,114 |
