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Identify whether each of the following items increases or decreases cash flow:
The Rogers Corporation has a gross profit of $880,000 and $360,000 in depreciation expenses.
The Evans Corporation also has $880,000 in gross profit, with $60,000 in depreciation expense.
Selling and administration expense is $120,000 for each company.
Given that the tax rate is 40 percent, compute the cash flow for both companies. Explain
the difference in cash flow between the two firms.
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Prepare a statement of cash flows for the Crosby Corporation. Follow the general procedures
indicated in Table 2-10 on page 38.
Crosby Corporation | |
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Operating activities: | | | | | |
Investing activities: | | | | | |
Financing activities: | | | | | |