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83) Thompson's Jet Skis has operating cash flow of $11,618. Depreciation is $2,345 and interest
paid is $395. A net total of $485 was paid on long-term debt. The firm spent $6,180 on fixed
assets and decreased net working capital by $420. What is the cash flow of the firm?
A) $5,858
B) $8,203
C) $9,228
D) $5,018
E) $7,363
84) Lester's Markets has total revenues of $3,811, costs of $2,902, depreciation of $315, interest
expense of $168, and taxes of $89. At the beginning of the year, the firm had current assets of
$2,150, total assets of $4,908, and total liabilities of $1,964. At the end of the year, the current
assets are $2,202, total assets are $5,103, and total liabilities are $1,952. What is the amount of
net capital spending for the year?
A) −$182
B) $133
C) $458
D) $510
E) $285
85) The General Store has total revenue of $4,116, depreciation of $319, selling and
administrative expenses of $554, interest expense of $162, dividends of $75, cost of goods sold
of $2,354, and taxes of $186. What is the operating cash flow?
A) $1,118
B) $795
C) $1,147
D) $1,022
E) $720
86) Right Way Movers has interest expense of $168, total revenues of $38,411, costs of $28,515,
depreciation of $306, and taxes of $1,979. The beginning balance sheet has total assets of
$48,354, net fixed assets of $31,202, current liabilities of $14,207, and total liabilities of
$29,407. The ending balance sheet shows total assets of $49,305, net fixed assets of $33,406,
current liabilities of $17,318, and total liabilities of $30,404. What is the annual cash flow of the
firm?
A) $9,771
B) −$2,160
C) $15,168
D) $8,474
E) $2,857
87) For a given year, Mfg. Corp. had taxable income of $1,630 and a tax rate of 23 percent. The
firm neither issued nor repurchased shares of stock but did decrease its retained earnings by
$310. What is the cash flow to stockholders?
A) $1,749.50
B) $535.50
C) $959.50
D) $1,242.50
E) $1,565.10
88) Northern Express paid $85 in dividends and $110 in interest expense during a given year.
During that same year, the firm issued $40 in new equity shares, issued new debt of $65, and
repaid $23 of old debt. What is the cash flow to creditors for that year?
A) $152
B) $146
C) $237
D) $68
E) $46
89) At the beginning of this year, Blauser Industries had net fixed assets of $21,506 and total
assets of $32,687. At year's end, net fixed assets are $20,492 and total assets are $32,915. The
annual depreciation expense is $1,520. What is net capital spending for this year?
A) −$850
B) $506
C) −$1,292
D) −$2,534
E) $1,748
90) For the year, Jensen's has depreciation of $2,058, dividends paid of $125, interest expense of
$382, an addition to retained earnings of $3,408, and an increase in common stock of $2,500.
The total tax rate is 21 percent. What is the operating cash flow?
A) $6,460
B) $5,973
C) $5,325
D) $5,735
E) $6,408
91) Ledger Properties has the following financial information:
Current Year
Prior Year
Revenues
$
48,915
$
43,610
Administrative expenses
12,106
11,602
Interest expense
816
468
Cost of goods sold
29,715
26,309
Depreciation
1,408
1,387
Net fixed assets
32,711
31,984
Current liabilities
14,652
14,625
Common stock
15,000
14,000
Current assets
16,506
14,687
Long-term debt
12,200
?
Retained earnings
7,365
4,246
Dividends paid
290
275
What is the cash flow of the firm for the current year if the tax rate is 22 percent?
A) $1,885
B) $1,042
C) $2,297
D) $2,096
E) $2,517
92) For a given year, Rogers Express paid $318 in interest, $460 in dividends, and $368 in taxes.
The firm had a net income of $1,220, depreciation of $1,560, an increase in net working capital
of $220, an increase in net fixed assets of $950, and a decrease in long-term debt of $260. There
were no changes in the equity accounts other than the change in retained earnings. What is the
annual cash flow of the firm?
A) $3,148
B) $1,610
C) $2,780
D) $1,038
E) $50
93) JK Meadows has beginning current liabilities of $14,602 and total liabilities of $35,418. At
the end of the year, the current liabilities are $15,311 and the total liabilities are $37,604. During
the year, the firm paid $680 in dividends and $1,320 in interest. What is the cash flow to
creditors?
A) $3,230
B) $2,797
C) $3,135
D) −$157
E) −$267
94) During the year, Lasko's repaid $12,500 in long-term debt, borrowed $8,400, paid $611 in
interest and $740 in dividends, and had an operating cash flow of $16,207. The firm acquired
$33,500 in new fixed assets and sold $8,400 of old assets. Net working capital declined by
$1,592 during the year. What is the annual cash flow to stockholders?
A) $1,200
B) −$2,590
C) −$8,828
D) −$12,012
E) $2,800
95) Last year, Webster Farms had annual revenue of $87,200, depreciation of $11,600, cost of
goods sold of $54,700, and administrative expenses of $8,300. The firm paid $3,200 in dividends
and paid taxes of $2,646. What was the operating cash flow?
A) $21,500
B) $18,300
C) $23,100
D) $21,554
E) $23,700
96) Last year, Oscar's Dog Treats had a cash flow to creditors of $2,840 and a cash flow to
stockholders of $1,630. The firm spent a net of $1,420 on fixed assets and reduced net working
capital by $330. What was the operating cash flow?
A) $6,190
B) $5,560
C) $3,500
D) $1,320
E) $4,901
97) Quick Marts increased its cash by $418 this year. The firm's statement of cash flows shows
total cash flow from financing activities of $246 and total cash flow from investing activities of
−$184. What is the total cash flow from operations on this accounting statement?
A) $480
B) $356
C) $427
D) $367
E) $391
98) JJ's has net sales of $48,920, depreciation of $711, cost of goods sold of $31,890,
administrative costs of $11,210, interest expense of $680, dividends paid of $450, and taxes of
$974. What is the cash flow from operations as it will appear on the accounting statement of cash
flows if the firm spent $274 on net working capital?
A) $3,892
B) $3,056
C) $4,066
D) $3,667
E) $3,391
99) Define liquidity and explain what a firm would need to do to ensure all of the current assets
displayed on its balance sheet are liquid.
100) Discuss the difference between book values and market values on the balance sheet and
explain the best method for determining the value of a firm to its stockholders.
101) Note that in all of our computations to determine the cash flows of a firm, we never include
the addition to retained earnings. Why not? Is this an oversight?
102) From a financial perspective, why is interest expense excluded from the operating cash
flow?
103) Explain why the income statement is not a good representation of cash flow.
104) Depreciation is classified as a noncash item because no cash is spent when depreciation is
recorded. Why are expenses that have been accrued, but not yet paid, not also considered to be
noncash items and therefore excluded from operating cash flow just as depreciation is excluded?
105) Interpret, in words, what the cash flow of the firm represents by discussing operating cash
flow, changes in net working capital, and additions to fixed assets.
106) Why is cash flow management important?
