Quiz 2 part 1 (10 points). Using the following income statement and balance shee

Question

Quiz 2 part 1 (10 points). Using the following income statement and balance sheet prepare the financial statement of cash flow (format it on the next page) and submit it via dropbex by 01/28/2018 Nabors, Inc. 2011 Income Statement (S in millions) $9,610 6,310 Net sales Less: Cost of goods sold Less: Depreciation Earnings before interest and taxes Less: Interest paid Taxable Income Less: Taxes Net income 370 1,930 $1,300 $ 845 Nabors, Inc 2010 and 2011 Balance Sheets (S in millions) 2010 2011 2011 S 310 S 405 2,640 3,055 2010 Accounts payable Notes payable S 2,720 S 2,570 Cash Accounts ree. Inventory Total Net fixed assets 3,2753.850 Total S6225 S 7310Long-term debt 7,875 5,000 -490 8,100 5,250 ,060 S17.980 0960-10670 Common stock Retained earnings Total asset S17,185 S17,980 Total liab.& equity S17185 Note: Retained carnings.is listed as a separate line item in this balance sheet (where as retained earnings were part of common stock in the balance sheet before)

Explanation / Answer

1) STATEMENT OF CASH FLOWS Cash flows from operating activities: Net income 845 Adjustments to reconcile net income with net cash from operating activities: Depreciation 1370 Increase in accounts receivable -415 Increase in inventory -575 Decrease in accounts payable -150 230 Net cash provided by operating activities 1075 Cash flows from investing activities: Purchase of equipment (10670-10960+1370) -1080 Net cash used by operating activities -1080 Cash flows from financing activities: Increase in long term debt (8100-7875) 225 Redemption of notes payable -100 Dividends paid (2060-1490-845) -275 Common stock issued 250 Net cash used by financing activitie 100 Net increase in cash and cash equivalents 95 Cash & cash equivalents at the beginning of year 310 Cash & cash equivalents at the end of year 405 2)a) CASH FLOW FROM ASSETS (Using the formulae given) Operating cash flow = 1930+1370-455= 2845 Net capital spending = 10670-10960+1370 = 1080 Changes in NWC = (7310-2570)-(6225-2720) = 1235 CASH FLOW FROM ASSETS (2845-1080-1235) = 530 2)b) CASH FLOW TO CREDITORS = 630-125 = 505 2)c) CASH FLOW TO STOCKHOLDERS = 275-250 = 25

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.