The Statement of Cash Fl , Decision Case 16-1 Theater by Design and Show Cinemas are asking you to recommend their stock to your clients. Because Theater by Design and Show Cinemas carn about the same net income and have similar financial positions, your decision depends on their statement of cash flows, summarized as follows Net Cash Provided by Operating Activities Cash Provided by (Used for) Investing Activities: Theater by DesignShow 30,000 70,000 Purchase of Plant Assets Sale of Plant Assets (20,000) 40,000 S (100,000) 10,000 20,000 (90,000) Cash Provided by (Used for) Financing Activities: Issuance of Common Stock Payment of Long-term Debt 30,000 (40,000) S 10,000 Net Increase (Decrease) in Cash s 10,000 Based on their cash Blows,which company looks better? Give your reasons, Ethical Issue 16-1 Moss Exports is having a bad year. Net income is only $60,000. Also, two important overseas customers are falling behind in their payments to Moss, and Moss's accounts receivable are ballooning. The company desperately needs a loan. The Moss Exports Board of Directors is considering ways to put the best face on the company's financial statements. Moss's bank closely examines cash flow from operating activities. Danicl Peavey, Moss's controller, suggests reclassifying the receivables from the slow-paying clients as long-term. He explains to the board that removing the $80,000 increase in accounts receivable from current assets will increase net cash provided by operations. This approach may help Moss get the loan. Requirements Using only the amounts given, compute net cash provided by operations, both without and with the reclassification of the reccivables. Which reporting makes Moss look better? 1. 2. Under what condition would the reclassification of the receivables be ethical Unethical