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PROBLEM: Statement of Cash Flow Fey Inc reports the statement for the year ended December 31, 2014: Sales $1,890,000 Cost goods sold 610,400 Gross profit 1,279,600 Depreciation expense 53,000 Selling and administrative expense 574,000 Income before tax 652,600 Income expense 134,780 Netincome $ 517,820 The company also reports the following information from the balance sheet: December 31, December 31, 2014 2013 Cash $105,000 $42,000 Accounts receivable 85,000 50,000 Inventory 24,000 31,000 Accounts payable 165,000 189,000 Accrued selling and admin expenses 32,000 26,000 Taxes payable 114,000 72,000 Dividends payable 22,000 48,000 a. Prepare good form, the operating section o the statement of cash flow,using the direct method for Fey Inc. for December 31, 2014. b. Prepare good form, the operating section of the statement of cash flow using the indirect method for Fey Inc for December 31, 2014. a) Whati convey 2. Does the composition Verizons cash flow present "healthy" picture for 2010? Explain using the following matrix Assume Verizon isa mature firm. Use this table Part 2 What your expectation What Verizon's actual performance? (positive negative Does differ from your expectation? uncertain) of the cash flow Why? Please interprer each section item? Why expect be positive negative/ uncertain? Operating Cash Flow Investing Cash Flow Financing Cash PROBLEM Revenue Recognition Identify when each of the following companies should recognize revenue production begins, (il) cash collection after replacement cost are recovered (iv) point of sale (v) completion c product, and (vi) durin g production AND Discuss any income measurement risksthat could arise. evidence arrangement, (ii) delivery has occurred/ services have been rendered, (ii))price is fixed deter minable, collectability assured a. RealMoney provides investment advice for upfront fee. provides these customer: with rd-protected access Website where can download reports RealMoney website. b. Boeing whose from lone-termi contracts airlines Wells Fargo large commercia that earns interest onloans Harley Davidson manufactures and retails motorcydes provides financing for dealers and customers e) Allisaninternet clothing retailer It receives credit card payments wher customers place their orders products from warehouses within business days Point of revesue Risks

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Cash Receipts from Customers
Sales + beginning A/R – ending A/R
1,890,000 + 50,000 – 85,000 = 1,855,000
Cash Payment to Suppliers
Purchases + beginning A/P – ending A/P
Purchases = Cost of Goods Sold + ending inventory – beginning inventory
(610,400 + 24,000 – 31,000) + 189,000 – 165,000 = 627,400...
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