Polyolefins such as polyethylene undergo slow degradation when placed in air. Degradation occurs by reactions with atmospheric oxygen that lead to the formation of carbonyl groups (groups containing oxygen), gradual….
prepare a statement of cash flows for O’Brien Corporation.
O’Brien Corporation’s comparative balance sheets as of December 31, 20×8 and 20×7 and its income statement for the year ended December 31, 20×8 are presented on the opposite page. During 20×8, O’Brien Corporation engaged in these transactions:
a. Sold furniture and fixtures that cost $17,800, on which it had accumulated depreciation of $14,400, at a gain of $3,500.
b. Purchased furniture and fixtures in the amount of $19,800.
c. Paid a $10,000 note payable and borrowed $20,000 on a new note.
d. Converted bonds payable in the amount of $50,000 into 2,000 shares of common stock.
e. Declared and paid $3,000 in cash dividends.
1. Using the indirect method, prepare a statement of cash flows for O’Brien Corporation. Include a supporting schedule of noncash investing transactions and financing transactions.
2. User Insight: What are the primary reasons for O’Brien Corporation’s large increase in cash from 20×7 to 20×8, despite its low net income?
3. User Insight: Compute and assess cash flow yield and free cash flow for 20×8. Compare and contrast what these two performance measures tell you about O’Brien’s cash-generating ability.