Questions from Financial Reporting

Q: For the current year, a firm reported net income from operations

For the current year, a firm reported net income from operations of $20,000 on its income statement and an increase of $30,000 in cash from operations on the statement of cash flows. Explain some like...

Q: A firm owed accounts payable of $150,000 at the

A firm owed accounts payable of $150,000 at the beginning of the year and $250,000 at the end of the year. What influence will the $100,000 increase have on cash from operations?

Q: A member of the board of directors is puzzled by the fact

A member of the board of directors is puzzled by the fact that the firm has had a very profitable year but does not have enough cash to pay its bills on time. Explain to the director how a firm can be...

Q: Depreciation is often considered a major source of funds. Do you

Depreciation is often considered a major source of funds. Do you agree? Explain.

Q: Pickerton started the year with $50,000 in accounts receivable

Pickerton started the year with $50,000 in accounts receivable. The firm ended the year with $20,000 in accounts receivable. How did this decrease influence cash from operations?

Q: Aerco Company acquired equipment in exchange for $50,000 in

Aerco Company acquired equipment in exchange for $50,000 in common stock. Should this transaction be on the statement of cash flows?

Q: Describe the following terms, which indicate the period of time included

Describe the following terms, which indicate the period of time included in the financial statements: a. Natural business year b. Calendar year c. Fiscal year

Q: Operating cash flow per share is a better indicator of profitability than

Operating cash flow per share is a better indicator of profitability than is earnings per share. Do you agree? Explain

Q: Hornet Company had operating cash flow of $60,000 during

Hornet Company had operating cash flow of $60,000 during a year in which it paid dividends of $11,000. What does this indicate about Hornet’s dividend-paying ability?

Q: Into what three categories are cash flows segregated on the statement of

Into what three categories are cash flows segregated on the statement of cash flows?