Selected data (in thousands) derived from the income statement and balance sheet
ID: 2597992 • Letter: S
Question
Selected data (in thousands) derived from the income statement and balance sheet of National Beverage Co. for a recent year are as follows:
1
Income statement data:
2
Net income
$49,311.00
3
Gain on disposal of property
1,188.00
4
Depreciation expense
11,580.00
5
Other items involving noncash expenses
1,383.00
6
Balance sheet data:
7
Increase in accounts receivable
1,746.00
8
Decrease in inventory
990.00
9
Increase in prepaid expenses
605.00
10
Decrease in accounts payable
710.00
11
Decrease in accrued and other current liabilities
995.00
Required:
a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method for National Beverage Corp. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required.
National Beverage Co.
Cash Flows from Operating Activities (in thousands)
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net loss to net cash flow from operating activities:
4
5
6
7
Changes in current operating assets and liabilities:
8
9
10
11
12
13
b. Interpret your results in part (a).
The company has earnings and net cash flow from operating activities. The increase in accounts receivable indicates a(n) in sales. In addition, the company is using its cash to decrease its accounts payable balance, which indicates that the company is . Overall, National Beverage is doing financially.
1
Income statement data:
2
Net income
$49,311.00
3
Gain on disposal of property
1,188.00
4
Depreciation expense
11,580.00
5
Other items involving noncash expenses
1,383.00
6
Balance sheet data:
7
Increase in accounts receivable
1,746.00
8
Decrease in inventory
990.00
9
Increase in prepaid expenses
605.00
10
Decrease in accounts payable
710.00
11
Decrease in accrued and other current liabilities
995.00
Explanation / Answer
Answer:
National Beverage Co
Cash Flow statement
Cash Flows from Operating Activities:
Amount $
Amount $
Net Income
49311
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation Expense—Plant Assets
11580
Gain on sale of equipment
-1188
Other items involving noncash expenses
1383
Increase in Accounts Receivable
-1746
Decrease in inventory
990
Decrease in Accounts Payable
-710
Increase in prepaid expenses
605
Decrease in accrued and other current liabilities
-995
9919
Net Cash Provided by Operating Activities
59230
b)
Interpretation
here we can see that net Cash Flows from Operating Activities are showing positive result because the net income of the company is positive and increase in assets is not too much and at the same time there are little increase or decrease in the liability. This will ultimately result in positive net cash flow
National Beverage Co
Cash Flow statement
Cash Flows from Operating Activities:
Amount $
Amount $
Net Income
49311
Adjustments to Reconcile Net Income to Net
Cash Provided by Operating Activities:
Depreciation Expense—Plant Assets
11580
Gain on sale of equipment
-1188
Other items involving noncash expenses
1383
Increase in Accounts Receivable
-1746
Decrease in inventory
990
Decrease in Accounts Payable
-710
Increase in prepaid expenses
605
Decrease in accrued and other current liabilities
-995
9919
Net Cash Provided by Operating Activities
59230
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