3.23     PREPARING A STATEMENT OF CASH FLOWS FROM BALANCE SHEETS AND INCOME STATEMENTS. Fuso Pharmaceutical Industries develops, manufactures, and markets pharmaceutical products in Japan. Its main product is a solution used by individuals with artificial kidneys. Most individuals in Japan are covered by a national health insurance system. The Japanese government sets the policies for the propor- tion of health care costs covered by the government versus the proportion that is the respon- sibility of the individual. The government also establishes the prices for prescription drugs. The Japanese economy experienced recessionary conditions in recent years. In response to

 

these conditions, the Japanese government increased the proportion of medical costs that is the patient’s responsibility and lowered the prices for prescription drugs. Exhibit 3.30 pre- sents the firm’s balance sheets on March 31 of Year 1 to Year 4, and Exhibit 3.31 presents the firm’s income statements for the years ending March 31, Year 2 to Year 4.

 

 

                                                                             

 

 

Fuso Pharmaceutical Industries

Income Statements (amounts in millions) (Problem 3.23)

 

 

 

 

Required

a.    Prepare a worksheet for the preparation of a statement of cash flows for Fuso Pharmaceutical Industries for each of the years ending March 31, Year 2 to Year 4. Follow the format of Exhibit 3.13 in the text. Notes to the financial statements indi- cate the following:

(1)  The changes in Accumulated Other Comprehensive Income relate to revalu- ations of Investments in Securities to market value. The remaining changes in Investments in Securities result from purchases and sales. Assume that the sales occurred at no gain or loss.

(2)  No sales of property, plant, and equipment took place during the three-year period.

(3)  The changes in Other Noncurrent Assets are investing activities.

(4)  The changes in Employee Retirement Benefits relate to provisions made for retirement benefits net of payments made to retired employees, both of which the statement of cash flows classifies as operating activities.

(5)  The changes in Other Noncurrent Liabilities are financing activities.

b.   Prepare a comparative statement of cash flows for Year 2, Year 3, and Year 4.

c.    Discuss the relation between net income and cash flow from operations and the pat- tern of cash flows from operating, investing, and financing transactions for Year 2, Year 3, and Year 4.

 

 

Alpha Geek

(8)

Status NEW Posted 04 Jun 2017 05:06 AM My Price 8.00

-----------

Attachments

file 1496555690-1367349_1_636321348651864503_Cash-flow-estimation.xlsx preview (193 words )

Ma-----------rch----------- 3-----------1:Y-----------ear----------- 4-----------Yea-----------r -----------3Ye-----------arÂ----------- 2Y-----------ear----------- 1-----------Sal-----------esA-----------SSE-----------TSC-----------ost----------- of----------- go-----------ods----------- so-----------ldC-----------ash-----------Sel-----------lin-----------g a-----------nd -----------adm-----------ini-----------str-----------ati-----------ve -----------exp-----------ens-----------esA-----------cco-----------unt-----------s a-----------nd -----------not-----------es -----------rec-----------eiv-----------abl-----------eâ€-----------”Tr-----------ade-----------Int-----------ere-----------st -----------exp-----------ens-----------eIn-----------ven-----------tor-----------ies-----------Inc-----------ome----------- ta-----------x e-----------xpe-----------nse-----------Def-----------err-----------ed -----------inc-----------ome----------- ta-----------xes-----------Net----------- I-----------nco-----------meP-----------rep-----------aym-----------ent-----------sTo-----------tal----------- C-----------urr-----------ent----------- As-----------set-----------sIn-----------ves-----------tme-----------nts-----------Par-----------tic-----------ula-----------rsY-----------ear----------- 2 -----------(Â¥-----------)Ye-----------ar -----------3 (-----------Â¥)-----------Yea-----------r 4----------- (Â-----------¥)P-----------rop-----------ert-----------y, -----------pla-----------nt,----------- an-----------d e-----------qui-----------pme-----------nt,----------- at----------- co-----------stC-----------han-----------ge -----------in -----------ret-----------ain-----------ed -----------ear-----------nin-----------gs -----------inc-----------lud-----------ing----------- de-----------ffe-----------rd -----------tax----------- As-----------set-----------/(L-----------iab-----------lit-----------y)L-----------ess----------- ac-----------cum-----------ula-----------ted-----------

Not Rated(0)

• Buy Answer