Coors Brewing Company, founded in 1873, is the third largest U.S. brewer. Its tie to the magical appeal of the Rocky Mountains is one of its most powerful trademarks. Some of the items included in its recent annual consolidated statement of cash flows presented using the indirect method are listed here. Indicate whether each item is disclosed in the Operating Activities (O), Investing Activities (I), or Financing Activities (F) section of the statement or (NA) if the item does not appear on the statement. (Note: This is the exact wording used on the actual statement.)
____________ 1. Purchase of stock. [This involves repurchase of its own stock.]
____________ 2. Principal payment on long-term debt.
____________ 3. Proceeds from sale of properties.
____________ 4. Inventories (decrease).
____________ 5. Accounts payable (decrease).
____________ 6. Depreciation, depletion, and amortization.
Indicate whether each item would be added (+) or subtracted (−) in the computation of cash flow from operating activities using the indirect method.
_____1. Accrued expenses (increase).
_____2. Inventories (increase).
_____3. Accounts receivable (decrease).
_____4. Accounts payable (decrease).
_____5. Depreciation, depletion, and amortization.
M13-2 Determining the Effects of Account Changes on Cash Flow from Operating Activities (Indirect Method) LO2
Lion Nathan, brewer of XXXX, Toohey’s, and other well-known Australian brands, has net revenue of nearly $2 billion Australian. Some of the items included in its recent annual consolidated statement of cash flows presented using the direct method are listed here. Indicate whether each item is disclosed in the Operating Activities (O), Investing Activities (I), or Financing Activities (F) section of the statement or (NA) if the item does not appear on the statement. (Note: This is the exact wording used on the actual statement.)
_____1. Receipts from customers.
_____2. Dividends paid.
_____3. Payment for share buy-back.
_____4. Proceeds from sale of property, plant, and equipment.
Lisa K. Corporation reported net income of $86,000, depreciation expense of $2,000, and cash flow from operations of $52,500. Compute the quality of income ratio. What does the ratio tell you about the company’s ability to finance operating and other cash needs from operating cash inflows?
