Unit 6 Cost Accounting

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Unit 6 Statement of Cash Flows and Financial Statement Analysis & The Metrics of a Company
Unit Assignment
Kaplan University

January 18, 2013
AC505: Advanced Managerial/Cost Accounting

|Transaction |Operating |Investing |Financing | |A. Paid bills to insurers and utility providers |X | | | |B. Purchased equipment with cash | |X | | |C. Paid wages and salaries to employees |X | | | |D. Paid taxes to the government |X | | | |E. Loaned money to another entity | |X | | |F. Sold common stock | | |X | |G. Paid a cash dividend to stockholders | | |X | |H. Paid interest to lenders |X | | | |I. Repaid the principal amount of a debt | | |X | |J. Paid suppliers for inventory purchases |X | | | |K. Borrowed money from a creditor | | |X | |L. Paid cash to repurchase its own stock | | |X | |M. Collected cash from customers |X | | |

Chapter 14: Statement of Cash Flows
Exercise 14—1 Classifying Transactions

Exercise 14-5 Prepare a Statement of Cash Flows

1.) Net Income75
Adjustments:
Depreciation40
Decrease in Accounts Receivable 10
Increase in Inventory(30)
Decrease in Prepaid Expenses5
Increase in Accounts Payable20
Decrease in Accrued Liabilities(10)
Increase in Income Taxes Payable15
Loss on Sale of Inventory5
Gain on Sale of Land(40)15
Net Cash Provided by Operating Activities$90

2.)
Herald Company
Statement of Cash Flows
Operating Activities
Net Cash Provided by Operating Activities$90
Investing Activities
Proceeds from Sale of Long Term Investments45
Proceeds from the Sale of Land70
Increase to Long-Term Investments(20)
Increase to Plant, Property, and Equipment(150)
Net Cash Used in Investing(55)
Financing Activities
Retirement of Bonds Payable(20)
Issuance of Common Stock40
Cash Dividends(35)
Net Cash Used in Financing(15)

Net Increase in Cash20
Cash Balance, Beginning100
Cash Balance, Ending$120

Chapter 15: Financial Statement Analysis

Exercise 15-2 Financial Ratios for Common Stockholders
1.) Gross Margin Percentage
= Gross Margin/Sales
= $23,000/66,000
= 34.8%

2.) Earnings per share of Common Stock
= (Net Income – Preferred Dividends)/Average Number of Common Stocks Outstanding
= ($1,980-60)/600
= $3.20 per Share

3.) Price-Earnings Ratio
= Market Price per Share/Earnings per Share
= $26/3.20
= $8.13

4.) Dividend Payout Ration
=...
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