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    Cash Flow Excercise Questions-Set-2

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    AgA
    Lori Crump owns a small trucking company. The bookkeeper provided income statements and balance sheets for 2010 and 2009. While the company had a $11,000 loss in 2010, it had $17,600 more cash than in 2009. Crump does not understand how this is possible. An indirect cash flow statement is required to explain the discrepancy to Crump. The owner of a small business provided cash account information for the year and additional financial records. A direct cash flow statement is required to show where the firm's cash came from and how it was used during the year.

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    Cash Flow Excercise Questions-Set-2

    Uploaded by

    AgA
    116 views2 pages
    Lori Crump owns a small trucking company. The bookkeeper provided income statements and balance sheets for 2010 and 2009. While the company had a $11,000 loss in 2010, it had $17,600 more cash than in 2009. Crump does not understand how this is possible. An indirect cash flow statement is required to explain the discrepancy to Crump. The owner of a small business provided cash account information for the year and additional financial records. A direct cash flow statement is required to show where the firm's cash came from and how it was used during the year.

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    Cash flow excercise questions-set-2

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    Lori Crump owns a small trucking company. The bookkeeper provided income statements and balance sheets for 2010 and 2009. While the company had a $11,000 loss in 2010, it had $17,600 more cash than in 2009. Crump does not understand how this is possible. An indirect cash flow statement is required to explain the discrepancy to Crump. The owner of a small business provided cash account information for the year and additional financial records. A direct cash flow statement is required to show where the firm's cash came from and how it was used during the year.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    116 views2 pages

    Cash Flow Excercise Questions-Set-2

    Uploaded by

    AgA
    Lori Crump owns a small trucking company. The bookkeeper provided income statements and balance sheets for 2010 and 2009. While the company had a $11,000 loss in 2010, it had $17,600 more cash than in 2009. Crump does not understand how this is possible. An indirect cash flow statement is required to explain the discrepancy to Crump. The owner of a small business provided cash account information for the year and additional financial records. A direct cash flow statement is required to show where the firm's cash came from and how it was used during the year.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    Cash flow statement problems

    1. Lori Crump owns a small trucking operation. The bookkeeper presented Crump with the
    following income statements and balance sheets for 2010 and 2009.
    INCOME STATEMENTS
    2010 2009
    Revenues $ 191,400 $ 182,600
    Operating expenses:
    Depreciation $ 26,400 $ 26,400
    Fuel 77,000 46,200
    Drivers sakaries 44,000 35,200
    Tax and licenses 22,000 17,600
    Repairs 30,800 19,800
    Miscellaneous 2,200 202,400 1,100 146,300
    Income(Loss) $ (11,000) $ 36,000

    BALANCE SHEETS
    12/31/2010 12/31/2009
    Cash $ 22,000 $ 4,400
    Accounts recievable 8,800 26,400
    Net fixed assets 198,000 224,400
    Total Assets $ 228,000 $ 255,200

    Accounts payable $ 30,800 $ 22,000


    Accrued salaries 8,800 5,500
    Other accruals 3,300 1,100
    Long term debt 100,100 129,800
    Crump, capital 85,800 96,800
    Total Liabilities and Capital $ 228,800 $ 255,200

    Crump does not understand how the company can be $17,600 ahead of last year in terms of cash
    on hand and yet show an $11,000 loss for the year.
    Required:
    Prepare a cash flow statement (indirect method) to use in explaining this to Lori Crump.
    2. The owner of a small business has asked you to prepare a statement that will show him where
    his firm's cash came from and how it was used this year. He gives you the following information
    based on the Cash account in his general ledger:
    Balance at beginning of year $ 3,450
    Collection of accounts receivable 34,500
    Interest on savings account 345
    Sale of old machine 3,105
    Cash sales 27,600
    Total 69,000
    Payment on vendor accounts $ 17,250
    Cash purchase of supplies 345
    Cash purchase of inventory 17,250
    Down payment on new truck 3,450
    Rent payments 8,625
    Utilities 2,070
    Interest payment 1,035
    Other miscellaneous expenses 1,725
    Payment on debt 3,450
    Part-time help 6,900 62,100
    Balance at end of year $ 6,900

    In addition, the following is available from company records:


    1. Sales were $61,410 for the year.
    2. The Accounts Receivable balance decreased by $690.
    3. Cash operating expenses totaled $54,165 (including cost of sales, supplies, rent, utilities, part-
    time help, and other miscellaneous expenses).
    4. Accounts Payable decreased by a net of $2,760 during the year.
    5. The Inventory balance remained constant throughout the year.
    6. Depreciation of $1,725 was taken this year.
    Required:
    Prepare a cash flow statement using the direct method.

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