FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
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Chapter 1, Problem 1.4EYCT
INTERPRETING FINANCIAL STATEMENTS
Xerox was not having a particularly pleasant year. The company’s stock price had already fallen in the previous year from $60 per share to $30. Just when it seemed things couldn't get worse, Xerox's stock fell to $4 per share. The data below were taken from the statement of
instructions
Analyze the information, and then answer the following questions.
- (a) If you were a creditor of Xerox, what reaction might you have to the above information?
- (b) If you were an investor in Xerox, what reaction might you have to the above information?
- (c) If you were evaluating the company as cither a creditor or a stockholder, what other information would you be interested in seeing?
- (d) Xerox decided to pay a cash dividend. This dividend was approximately equal to the amount paid in the previous year. Discuss the issues that were probably considered in making this decision.
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Blossom Chemicals management identified the following cash flows as significant in its year-end meeting with analysts: During the
year Blossom had repaid existing debt of $316,800 and raised additional debt capital of $645,800. It also repurchased stock in the
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Net cash provided by financing activities
$
Mary Walker, president of Rusco Company, considers $27,000 to be the minimum cash balance for operating purposes. As can be seen from the following statements, only $22,000 in cash was available at the end of this year. Since the company reported a large net income for the year, and also issued both bonds and common stock, the sharp decline in cash is puzzling to Ms. Walker.
Rusco CompanyComparative Balance Sheetat July 31
This Year
Last Year
Assets
Current assets:
Cash
$ 22,000
$ 41,400
Accounts Receivable
229,800
219,100
Inventory
256,300
200,200
Prepaid expenses
11,900
23,400
Total current assets
520,000
484,100
Long-term investments
111,000
155,000
Plant and equipment
874,000
757,000
Less accumulated depreciation
213,500
192,100
Net plant and equipment
660,500
564,900
Total assets
$ 1,291,500
$ 1,204,000
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$ 237,700
$ 176,400
Accrued liabilities
8,700…
At the beginning of the year, the balance sheet of The Outlet showed $8 in the
common stock account and $138 in the additional paid-in surplus account. The end-
of-year balance sheet showed $20 and $232 in the same two accounts, respectively.
The company paid out $48 in cash dividends during the year. What is the cash flow
to stockholders for the year? Use a negative sign if the cash flow to stockholders
was negative. Do not use the $ sign in your answer.
Your Answer:
Chapter 1 Solutions
FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
Ch. 1 - Prob. 1QCh. 1 - Prob. 2QCh. 1 - Prob. 3QCh. 1 - Accounting is ingrained in our society and is...Ch. 1 - Prob. 5QCh. 1 - Prob. 6QCh. 1 - What are the three main types of business...Ch. 1 - Prob. 8QCh. 1 - Prob. 9QCh. 1 - Prob. 10Q
Ch. 1 - Prob. 11QCh. 1 - What are the three main categories of the...Ch. 1 - Prob. 13QCh. 1 - Prob. 14QCh. 1 - Prob. 15QCh. 1 - Which of these items are liabilities of White...Ch. 1 - How are each of the following financial statements...Ch. 1 - What is the purpose of the management discussion...Ch. 1 - Prob. 19QCh. 1 - Prob. 20QCh. 1 - Prob. 21QCh. 1 - Prob. 1.1BECh. 1 - Match each of the following types of evaluation...Ch. 1 - Indicate in which part of the statement of cash...Ch. 1 - Prob. 1.4BECh. 1 - Prob. 1.6BECh. 1 - Indicate which statement you would examine to find...Ch. 1 - Prob. 1.8BECh. 1 - Prob. 1.9BECh. 1 - Prob. 1.10BECh. 1 - Prob. 1.11BECh. 1 - Prob. 1.1DIECh. 1 - Prob. 1.2DIECh. 1 - Prob. 1.3bDIECh. 1 - Here is a list of words or phi uses discussed in...Ch. 1 - Prob. 1.4ECh. 1 - Prob. 1.9ECh. 1 - Prob. 1.12ECh. 1 - Prob. 1.19ECh. 1 - Prob. 1.21ECh. 1 - Prob. 1.1APCh. 1 - Financial decisions often place heavier emphasis...Ch. 1 - INTERPRETING FINANCIAL STATEMENTS Xerox was not...Ch. 1 - Prob. 1.5EYCTCh. 1 - Prob. 1.9EYCTCh. 1 - Prob. 1.10EYCTCh. 1 - Prob. 1.1IPCh. 1 - Prob. 1.2IPCh. 1 - Prob. 1.3IP
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