cash flows in Tripp Company, business and finance homework

 

 

1. The following information is given for Tripp Company, which uses the indirect method.

Net income  – $20,000

Depreciation expense – $3,000

Increase in accounts receivable – $2,000

Payment of dividends – $2,000

Proceeds from sale of equipment – $6,000

Increase in accounts payable – $4,000

Decrease in inventory – $3,000

From the information provided, answer the following questions:

The cash flow from operating activities is ________.

The cash flow from investing activities is ________.

The cash flow from financing activities is ________.

2. Selected data for Stick’s Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth).

Year 2                                   Year 1

Net Credit Sales              $25,000                                $30,000

Cost of Goods Sold         16,000                                  18,000

Net Income                       2,000                                    2,800

Cash                                 5,000                                    900

Accounts Receivable       3,000                                    2,000

Inventory                         2,000                                    3,600

Current Liabilities             6,000                                    5,000

Compute the following:

Current ratio for Year 2

Acid-test ratio for Year 2

Accounts receivable turnover for Year 2

Average collection period for Year 2

Inventory turnover for Year 2

3. Prepare an income statement showing departmental contribution margin based on the following:

Dept. X                     Dept. Y                          Rent Expense

Space (square feet)        17,500                                                             35,000

Net Sales                         $60,000                  $40,000

Cost of Goods Sold        $18,000                                                            $16,000

Rent Expense (allocated based on square feet)                                    $2,700

4. From the following transactions, prepare the appropriate general journal entries for the month of April.

1. Raw materials costing $60,000 were issued from the storeroom.

2. Direct labor of $53,000 was charged to production.

3. Indirect labor costs of $17,000 were incurred.

4. Overhead was applied at the rate of 40% of direct labor dollars.

5. Completed products costing $42,000 were transferred to finished goods.

6. Products costing $32,000 were sold.