31 Dec 19. Operating Activities Section Using the Indirec
19. Operating Activities Section Using the Indirect Method. The following income statement and current sections of the balance sheet are for Donzi, Inc.Required:Using the indirect method, prepare the operating activities section of the statement of cash flows for Donzi, Inc., for the year ended December 31, 2012. Use the format presented in Figure 12.5 ‘Operating Activities Section of Statement of Cash Flows (Home Store, Inc.)’.21. Investing Activities Section. The following information is from the noncurrent asset portion of Santana, Inc.’s balance sheet.The following activities occurred during 2012:Sold equipment with a book value of $3,000 (= $13,000 cost $10,000 accumulated depreciation) for $4,000 cash and depreciation expense for the year totaled $26,000Purchased property for $43,000 cashPurchased long-term investments for $15,000 cashRequired:Prepare the investing activities section of the statement of cash flows for Santana, Inc., for the year ended December 31, 2012. Use the format presented in Figure 12.6 ‘Investing Activities Section of Statement of Cash Flows (Home Store, Inc.)’.22. Financing Activities Section. The following information is from the noncurrent liabilities and owners’ equity portions of Canton Company’s balance sheet.The following activities occurred during 2012:Issued bonds for $80,000 cashIssued common stock for $100,000 cashEarned net income totaling $60,000Paid cash dividends totaling $15,000Required:Prepare the financing activities section of the statement of cash flows for Canton Company for the year ended December 31, 2012. Use the format presented in Figure 12.7 ‘Financing Activities Section of State36. Profitability and Short-Term Liquidity Ratios. Refer to the information presented in Problem 35 for Nordstrom.Required:Compute the following profitability ratios for 2010, and provide a brief explanation after each ratio (round percentage computations to one decimal place and earnings per share to two decimal places):Gross margin ratioProfit margin ratioReturn on assetsReturn on common shareholders’ equityEarnings per share (weighted average shares outstanding totaled 218,800,000 shares)Compute the following short-term liquidity ratios for 2010, and provide a brief explanation after each ratio (round computations to two decimal places):Current ratioQuick ratioReceivables turnover ratio and average collection period (assume all sales are on account)Inventory turnover ratio and average sale period37. Long-Term Solvency Ratios and Market Valuation Measures. Refer to the information presented in Problem 35 for Nordstrom.Required:Compute the following long-term solvency ratios for 2010, and provide a brief explanation after each ratio (round computations to two decimal places):Debt to assetsDebt to equityTimes interest earnedCompute the following market valuation measures for 2010, and provide a brief explanation after each measure (state market capitalization in billions, and round price-earnings ratio to two decimal places):Market capitalization (assume 218,000,000 shares were issued and outstanding at January 29, 2011, and the market price was $40.08 per share)Price-earnings ratio (assume the earnings per share amount was $2.80)ment of Cash Flows (Home Store, Inc.)’.
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