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Chaplin Arts, Inc.?s comparative balance sheets for December 31, 2014 and 2013, follow:

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Chaplin Arts, Inc.?s comparative balance sheets for December 31, 2014 and 2013, follow;AND SO ON.................;The following additional information about Chaplin Art?s operations during 2013 is available;(a) net income, $28,000, (b) building and equipment depreciation expense amounts, $15,000 and $3,000, respectively, (c) equipment that cost $13,500 with accumulated depreciation of $12,500 sold at a gain of $5,300, (d) equipment purchases, $12,500, (e) patent amortization, $3,000, purchase of patent, $1,000, (f) funds borrowed by issuing notes payable, $25,000, notes payable repaid, 15,000, (g) land and building purchased for $162,000 by signing a mortgage for the total cost, (h) 1,500 shares of $20 par value common stock issued for a total of $50,000, and (i) paid cash dividends, $9,000.;Required;1. Using the indirect method, prepare of a statement of cash flows for Chaplin Arts.;2. Why did Chaplin Arts have an increase in cash of $67,200 when it recorded net income of only $28,000? Discuss and interpret.;3. Compute and assess cash flow yield and free cash flow for 2014. (Round to one decimal place.) What is your assessment of Chaplin Arts? cash-generating ability?;Check Figures;Net Cash Flows from Operating Activities: $23,400;Net Cash Flows from Investing Activities: ($7,200);Net Cash Flows from Financing Activities: $51,000

 

Paper#80197 | Written in 18-Jul-2015

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