hi,good evening please solve the q5.3 which Preparing and Analyzing a Statement of Cash Flows that incluide part a,b,c
Analyzing the Statement of Cash Flows 97 Required McDonald's reports cash flows from operating activities using the indirect method. How would the $237 million loss in 2003 for the sale of Donatos and other be reported on the company's statement of cash flows? Why? b. Explain how the $15 million favorable adjustment to the 2001 restructuring charge is accounted on each of the three principal financial statements for 2002. 5.3 Preparing and Analyzing a Statement of Cash Flows Allen Company produces roofing supplies and insulation materi- als for use in home and commercial construction. Although Allen has been growing, recent lack of production capacity has caused production delays, some stockouts of finished goods, and a shift in the inventory mix from finished goods to raw materials and work in process. Allen Company's comparative balance sheet data and additional information follow: Net loss for the year was $110.000. The intangible assets have limited lives and were amortized by $10,000 during the year. Investment in affiliates represents equity method investments, The income statement reported $80,000 income from equity method investments. $10,000 dividends were received from affiliates. Remaining changes in the account relate to addi- tional investments. Less efficient equipment with an original cost of $200,000 was sold during the year for $40,000. The accumulated deprecia- tion on that equipment was $130,000. Cash dividends of $12,000 were declared and paid during the year. The company also declared and distributed a $30,000 stock dividend during the year. . The company repurchased the stock of a dissident shareholder during the year and retired the shares. The company paid $70,000 (which was the original issue price of the shares), No long-term notes were retired during the year. Required a. Prepare a statement of cash flows for 2017. b. Discuss the relationship between net income and CFFO and the relationship among cash flow from operating, investing, and financing activities during the two years. Be as specific as the data allow. c. Identify two conditions in the operating section of the state- ment which point to the possibility that CFFO might decline next year. Allen Company Comparative Balance Sheets 2017 2016 Assets $60,000 Cash Accounts receivable, net Inventory Prepaid expenses $108,000 320,000 450,000 27,000 235,000 510,000 30,000 Total current assets Investments in affiliates Property, plant, and equipment Less accumulated depreciation Intangible assets 905,000 200,000 1,100,000 835,000 100,000 950,000 (370,000) 45,000 (440,000) 35,000 5.4 Interpreting the Role of Accounts Payable in Cash Flow from Operations AB InBev is the world's largest brewer. An abbreviated version of the operating activities section of the company's statement of cash flows appears below: Total assets $1,800,000 $1,560,000 Liabilities and shareholders' equity Accounts payable Accrued liabilities $554,000 36,000 $400,000 38,000 Cash flows from operating activities (million US dollars) 2011 2010 438,000 100,000 7,959 7,420 5,762 8,503 Total current liabilities Long-term notes payable Contributed capital Retained earnings Total liabilities and shareholders' equity 590,000 380,000 710,000 120,000 750,000 272,000 15,379 14,265 $1,800,000 $1,560,000 Profit Interest, taxes, and noncash items included in profit Cash flow from operating activities before changes in working capital and use of provisions Change in working capital Pension contributions and use of provisions Interest and taxes (paid)/received Dividends received 226 The following additional information is available: The company's stock has no par or stated value. Contributed capital is shown as one amount (i.e., no distinction between common stock and capital in excess of par). 1,409 (710) (3,998) 406 (519) (4,450) 383 Cash flow from operating activities 12,486 9,905
