Premium Essay

Go with the Flow Inc. Case

In: Business and Management

Submitted By blaze4yu
Words 1297
Pages 6
TO: Go With the Flow Inc.
FROM: Olivia Bogle, Laura Cox, J.T. Mack, and Erica Patterson
RE: Statement of Cash Flows


Go With the Flow Inc. (Go With the Flow) designs, manufactures, and sells a large variety of mobile network and communication products. The company’s communication devices include mobile, cordless, and corded telephones. Go With the Flow’s liquidity primarily comes from the company’s cash flows, debt and revolving credit facilities, and the sale of trade accounts receivables. Three of the company’s cash flow transactions are insurance settlement proceeds, sale of accounts receivable, and acquisition of property, plant, and equipment on account. This memo will analyze each transaction under Financial Account Standards Board’s (FASB) Accounting Standards Codification (ASC) 230, Statement of Cash Flows. This memo will also appropriately classify each transaction and discuss any timing issues related to the Statement of Cash Flows.

Insurance Settlement Proceeds

What is the proper classification for the statement of cash flows related to insurance proceeds?

A tornado destroyed one of the company’s manufacturing facilities, in turn; Go With the Flow received a $20 million settlement from an insurance carrier in the current year. The company decided not to rebuild the facility, instead, they will use the insurance proceeds to fund a defined-benefit pension plan. According to ASC 230-10-45-12, directly related insurance proceeds on a damaged or destroyed building is an investing activity for the statement of cash flows.

These insurance proceeds are not financing activities because according to ASC 230-10-45-14, financing activities come from debt instruments such as notes and bonds, or long and short-term borrowing. Insurance proceeds are the result of a settlement, not issuing debt or borrowing.


Similar Documents

Premium Essay

Cash Flow Case

...25= 1.07375 2010: (26305.98-5806.98)/17064.18= 1.20129 In 2008 and 2009, income and cash flow from operations were close together; in 2010, income became slightly less than cash flows. Company B Quality of Income ratio 2009: (21863.99-11428.77)/(-88837.52)= -0.11746 2010: (11.76-17448.86)/7137.10= -2.44316 2011: (-60812.34-16490.59)/(-79225.36)= 0.97573 In 2009 and 2010, income was not a good predictor of cash flows; in 2011, income was close to cash flows. Company C Quality of Income ratio 2008: (-6343.23-503.11)/(-10018.79)= 0.68335 2009: (-9781.94-839.92)/(-6746.00)= 1.57454 2010: (-15469.21-1285.66)/(-18677.73)= 0.89705 In 2008 and 2010, cash flows were less than income but in 2009, income was less than cash flows. 3. Company A: Major investing transaction: capital expenditures, purchase of available for sale securities, and sale & maturity of available for sale securities Major financing transaction: shares repurchased & retired, and dividends paid in cash. Primary source of cash flows is cash flow from operations. Company B: Major investing transaction: purchases of property & equipment Major financing transaction: proceeds from borrowings, borrowing repayments, and net note borrowings (payments). In 2009, primary source of cash flows was cash flow from operations; in 2010 and 20011, primary source of cash flows is cash flow from financing Company C: Major investing transaction: in 2008 &2009, purchases of......

Words: 1342 - Pages: 6

Premium Essay

Case Study Abc Inc,

...Case Study Analysis Tiffany Owen October 14, 2010 COMM/215 Conrad Davies Introduction: Carl Robins is currently facing a challenging problem as the new recruiter for ABC, Inc. He had only been employed with the company for six months when he was promothed to this position. He just recently recruited fifteen new trainees, however, it appears that his lack of experience has led to several problems occurring days before the new trainees are supposed to begin training. Background: Carl Robins is the new campus recruiter for ABC, Inc. He has only held this new position for the past six months. In early April, Carl successfully recruited fifteen new hires for the company. This was Carl’s first recruitment effort. Carl had hired these fifteen new trainees to work for Ms. Monica Carrolls. Ms. Carrolls is the Operation Supervisor for ABC, Inc. Carl had scheduled a new hire orientation, which was to take place on June 15. He wanted to have all of the new hires working by July. Ms. Carrolls contacted Carl on May 15 about the training schedule, orientation manuals, policy booklets, physicals, drug tests, and many other issues that Carl was responsible for coordinating for the fifteen new hires. Carl assured Ms. Carrolls that everything would be ready on time. After the Memorial Day holiday, Carl was sitting in his office and pulled out his new trainee file to finish up all of the necessary paperwork needed for the orientation on June 15. While he was going......

Words: 1128 - Pages: 5

Premium Essay

Snacks to Go Case Analysis

...SNACKS TO GO (CASE 11) 1. Sathers’ company objective was to be one of the first companies to produce a healthy zip lock package filled with nuts and natural snacks. The objective was to tap into the market of people who led busy lives and wanted to eat a snack in a package that was resealable to enjoy at a later time. Since the Sathers’ nuts and snacks weren’t as well-known as their candy, they were able to build stronger brand awareness that was introduced through their Snacks to Go line. 2. In developing Snacks To Go, Sathers’ product conducted a market development strategy. His product, which was ultimately selling healthy snacks, was already in place but he was selling to different kind of customer. The customer he was selling to was the one on the go. With his innovative zip lock resealable bag it appealed to a new market, which would put this snacks to go in the Market development. It can also be used as a penetration to the existing customers who previously enjoyed nuts but now can enjoy the convenience of the snacks in a busy setting. 3. Their study revealed, “that most consumers who preferred resealable packaging would switch brands and pay more for the food protection, convenience, and freshness that resealable packaging offered.” In their case, over half of the their respondents preferred nuts in a resealable packaging, and for those who ate nuts more often, most “believed that it was important to preserve the freshness of the food, to keep it from......

Words: 1353 - Pages: 6

Free Essay

Abc Inc.: Case Study

...ABC Inc.: Case Study Chris McCall EGN/215 September 29, 2013 ABC Inc.: Case Study In this case analysis essay; I will cover some major issues found in the recruiting procedures made by Carl Robins. Carl’s lack of training when he started as the new recruiter for ABC Inc. showed when he was unable to accomplish the job successfully. Introduction Mr. Robins is realizing that he has in his hand a challenging and complicated situation to resolve as the recruiter of the company ABC, Inc... Carl has been employed with the company for six months and got promoted to the position of recruiter for the company in that time frame. One part of his new assignments, he was required to recruit fifteen new employees for the company. It appears that Mr. Robins lack of knowledge and experience as a recruiter has result in the creation of some problems occurring just days before the newly hired trainees were supposed to begin their training. Background ABC, Inc. hired Mr. Carl Robins six months ago to be there new recruiter. He was completing the work needed to start his first new hires for April. The administration was very proud of Carl because was completing his first recruitment and he was able to hire 15 new employees for the company. He scheduled the new-hire training to take place in July in the training room. He was sure everything was in order for the new hires....

Words: 887 - Pages: 4

Free Essay

Abc, Inc. Case Study\

...ABC, Inc. Case Study Charles Ramsey Comm/215 Sept. 29, 2014 Margaret Mehl ABC, Inc. Case Study ------------------------------------------------- Introduction Hiring 15 new employees in early April as part of his first recruitment effort, Carl Robins is the new campus recruiter for ABC, Inc. Hired to work for Monica Carrolls, Operations Supervisor, these new potential employees require training on company policy, being oriented to the organization, and screened for drugs. Carl himself is behind on their training, has not completed all the required processing, in addition to the fact that some of the employees haven’t even completed applications, nor have submitted transcripts. Orientation needs to be arranged somewhere other than the original location, due to double booking conflicts. The training material also needs to be reviewed and confirmed for the employees prior to the seminar. Mr. Robins is quickly falling behind, so he needs to formulate a plan of action, and implement it concisely. ------------------------------------------------- Background Having successful hired 15 new people in early April, Carl had plenty of time to prior to June 15th in which to organize everything, but procrastinated until it became a scramble to handle everything at once. While he is in fact fairly new to his own job, having only been with ABC for six months now, he should still be able to handle this workload, and produce the desired results. This inexperience can explain some......

Words: 1703 - Pages: 7

Premium Essay

Avion Inc, Case

...AVION, INC. CASE 1.What parts of the supply chain are involved with the situation in this case? What is the responsability of each part in order to maintain a smooth flow of material? In this case, several parts of the supply chain are involved with the situation and they are as follows:  Production management, Foster Technologies Their responsability is to produce the material that the company Avion inc requires by the contract.Iftheycannot fullfilledwhatisrequestedandtheyneedtochangethem,they should communicate to the material management of Avion, Inc.  Procurement management, Avion, Inc. Their responsability is to communicate with the production group and with the material group more often. If they had known that the monthly volume requirements and the lead time was changed by the production group they would have not blame to Foster Technologies. Also, they should work with engineering more closely so they can locate more sources of technology and select suppliers efficiently. The flow of information with the supplier is also very important to identify the problems.  Production management, Avion, Inc. Their responsability is to produce the goods ordered. They should not have changed the requirements for the material. If they need to change them, they should communicate to the material management group.  Material management, Avion, inc. They should have pay more attention to the inquiries made by Poster Technologies. 2.What inicially appears to be the problem...

Words: 1289 - Pages: 6

Premium Essay

Abc Inc Case Study

...ABC Inc. Case Study Analysis Antonio Wiggins GEN/215 11/03/2014 Gayle Thomas ABC Inc. Case Study Analysis Introduction Carl Robins, the new campus recruiter for ABC, Inc., recruited fifteen new hires for the company that he works for. The new trainees are to be working for Monica Carroll’s, the Operations Supervisor. Carl scheduled new hire orientations for June 15, with a starting date to start tentatively in July. There is a scheduling conflict with the training room for the new hire orientation. Background Carl Robins is the new campus recruiter for ABC, Inc. Mr. Robins has recruited fifteen new hires that will be working for Monica Carroll’s, the Operations Supervisor. Carl Robins is also in charge of new hire orientation for ABC, Inc., in spite of only being with the company for six months. For his first recruitment effort, Carl is given the task in early April to take care of new hire orientations. Carl scheduled the new hire orientation for June 15th, with the expectation for all new hires to be working by early July. Carl’s responsibilities for new hire orientations include training schedule, orientation, manuals, policy booklets, drug tests and physicals. On May 15th, Monica contacted Carl to see how his progress was going with coordinating the orientation. Carl assured Monica that everything would be ready in time. Three weeks later after Memorial Day, Carl checked over his new hire files to finish the paperwork for the orientation. Carl......

Words: 1084 - Pages: 5

Premium Essay

Swan- Davis, Inc. Case

...Swan-Davis, Inc. Executive Summary We were assigned the task of analyzing Swan Davis’ capital value based on their current market performance. Currently, Swan Davis’ capital is comprised of bonds and equity. They have two types of bonds. Bond A is a highly liquid bond last priced at $1092 but has a fair market value of $813 due to the fact that the ratings of Swan Davis’ bonds decreased from A to BB. Bond B is an illiquid bond that was last priced at $850 but again due to the ratings of their bonds and that it is illiquid the fair value is actually $404. Swan Davis has preferred stock and common equity. Their preferred stock currently traded for $97 with dividend of $8.25. The after-tax return to investors for preferred stock was 1.53% for corporations and 5.13% for individuals. The cost of equity for common stock was 16.17% and 16.08% respectively. Valuation of capital is based on a number of factors such has ROE, debt management ratios and projected earnings growth just to name a few. These have to be calculated using current markets rates to determine if SDI’s performance aligns with the price that the market has valued it at. The methods used to calculate these figures may vary internally and externally given the information used in calculating them. Swan Davis’ performance has fluctuated given the level of competition and unstable profits. Although that may be they have managed keep their investors afloat with steady returns on equity. Their B bonds should......

Words: 1413 - Pages: 6

Premium Essay

Go with the Flow Inc.

...presented in the cash flow statement based on its intended use. Thus, these proceeds could be utilized for any purpose and will be presented accordingly in the cash flow statement. As given in the question, when the proceeds are used to fund its defined-benefit pension plan it will be classified as an operating cash outflow at the time. Alternative 1 The insurance settlement proceeds should be classified as an investing cash inflow in the statement of cash flows is the correct alternative. 2. Acquisition of Property, Plant, and Equipment on Account 230-10-45-14 through 45-15 states that payments at the time of purchase or soon before or after purchase to acquire property, plant, and equipment and other productive assets, including interest capitalized as part of the cost of those assets. Generally, only advance payments, the down payment, or other amounts paid at the time of purchase or soon before or after purchase of property, plant, and equipment and other productive assets are investing cash outflows. However, incurring directly related debt to the seller is a financing transaction, and subsequent payments of principal on that debt thus are financing cash outflows. Thus the code clearly states that only payment towards acquisition of property, plant, and equipment be presented as an investing cash outflow in the statement of cash flows. In the instant case, no payment is made until the year-end. Hence, it the transaction should not form part of the cash flow......

Words: 644 - Pages: 3

Premium Essay

Case Analysis - Apple Inc

...Unit 1 Case Analysis: Apple Inc. Background In January 2007, Apple Computer Inc was renamed Apple Inc. after 30 years of being a very productive organization. Apple Inc. changed from being known as strictly a Macintosh computer company into a diverse technology company that is known for its art, video, and graphics. They presented this diversity by selling new products such as; the Ipod used together with the iTunes store and the iPhone. In 2008, Apple Inc earned a profit of $1.07 billion from revenue of $7.46 billion. Over half of Apples income was generated from the sales in these new products (Yoffie &Slind, 2008). Steve Jobs and Steve Wozniak founded Apple Computer in April 1976. Their first computer was called the Apple I. Apple Computer was incorporated in 1977 by bring on another partner, A.C. “Mike” Markkula, Jr. With the help of Markkula, Jobs and Wozniak introduced the Apple II computer in 1978. The Apple II drove the PC industry up to $1 billion in annual sales in less than three years. Apple, of course was the industry leader by selling more than 100,000 Apple IIs by the end of 1980 (Yoffie &Slind, 2008). Apple Inc. Obstacles In 1981, IBM entered the market with its DOS operating system and a microprocessor from Intel. This made them competitors for Apple because IBM’s system was one that other producers could clone. Apple saw a 6.2% drop in their market shares in 1982 and the net income fell 17% between 1983 and 1984. This left the company in......

Words: 1590 - Pages: 7

Premium Essay

Blades Inc. Case

...Case: 1 BLADES, Inc. Case Question 1: How could a higher level of inflation in Thailand affects Blades (assume U.S. inflation remains constant)? Answer: Higher level of inflation in Thailand can affect Blades. Due to inflation in Thailand foreign goods will become cheap. Again inflation will increase in an increase of imports and at the same time exports will go down. As a result imports of rubber and plastic components from Thailand for Blades Inc. will suffer and it will increase their production cost. On the other hand due to inflation in Thailand customers will get products from Blades Inc. at a lower price relative to others, which will increase their (Blade Inc.) export to rise. Eventually their sales will increase. Question 2: How could competition from firms in Thailand and from U.S. firms conducting business in Thailand affects Blades? Answer: The main competitive advantage of Blade Inc. in this case is that they conduct their business (both export and imports) from Thailand in Thai Baht (Thailand’s currency). The other competitors who exports in Thailand invoice their exports in U.S. dollars. On the other hand because of competitive advantage of Blade Inc. allows importers to continue business without less consideration about paying different amounts due to currency fluctuations. In case of export Blade Inc. has an advantage of providing quality products and flexible pricing strategy, which gives them a good position in Thailand. Question 3: How could...

Words: 778 - Pages: 4

Premium Essay

Precision Worldwide, Inc Case

... Assignment #2 Precision Worldwide, Inc Summary Precision worldwide Inc is currently in the dilemma of determining how to go about the introduction of a new French and Japanese prototype of their steel ring. The French were able to reinvent this plastic ring at a lower cost and more durable at the same time. This is extremely detrimental to the steel ring market and will force precision worldwide out of business if actions are not taken. Related Business Issues 1. Excessive inventory levels of steel rings Hans thorborg carries large quantity of steels rings and special steels inventory, which values about $390,000. The special steels couldn’t even sale as scrap as it described in article. The article also indicates that hans thorborg will cost $110,900 to convert special steels into 34500 steels rings. Hans thorborg needs to take in to account the sunk cost of the steel ring and how to be effective with the production of the plastic ring. The sunk cost fallacy is that sunk costs are sunk whatever your decision is and only the future matters. The fallacy in thinking about the sunk costs is precisely that people feel completed to get their moneys work even if it makes them suffer Whether or not the steel rings sell. The second aspect that will influence han`s decision is the will still have over 15000 units when the date of plastic rings roll out. 2. Cost of Steel Rings and Manufacturing Facilities The total cost of 100 steel rings is $1107.90, which is about 3......

Words: 807 - Pages: 4

Premium Essay

Avion Inc Final Case

...Final Case Submission: Avion Inc. 1. What parts of the supply chain are most closely involved with the situation in this case? What is the responsibility of each part in order to maintain a smooth flow of material? Procurement and Contracts: Should be responsible to amend the agreement that clearly defines what the service level requirements are, sets out the change control mechanism, the communication protocol and representative of both parties and review the agreement in conjunction with the supplier to remove any ambiguity. Category Management: Should be responsible for developing a SQM that will allow provide both parties with a forum to work in partnership and set targets and KPIs. Material Management: Should be responsible to understand the required and forecast inventory stocks and coordinate accordingly. Logistics: Should be responsible for transporting the product through the supply chain. 2. What initially appears to be the problem? What really is the problem(s) in this case? The problem initially appears to be that the vendor is not meeting the expected performance level required by the customer. However the problem is not with the vendor rather within Avion. It appears that the company does not have appropriate cross function engagement, rather working in silos. There is no obvious communication structure whereby the SCM understands the scope requirements and can translate this to the vendor. Also following contract award it is not clear......

Words: 672 - Pages: 3

Premium Essay

Google Inc Case

...Date and time: November 29, 5pm Name of the Company under study: GOOGLE, INC (Text pages 712-715) Where Headquartered (city/state): Mountain View, Ca Part I: Comprehensive Case Analysis – Developing HR Business Partner Competencies in this Case Analysis 1.0 Background on your Company (Type the Company’s background in 3 paragraphs.). Tip: See the “about us” or company information portion of the company’s website or other source. Keep track of all your sources. They are to be included in Section 10 of this report. The creation of goggle’s company starts in 1996 between two smart students of Stanford University, Larry Page and Sergey Brin. They first try to understand the importance of web pages for people. Their aim was to find the best and faster way to connect people with all information. The company was founded in September 1998, they offer results from a huge amount of Web pages. The results are based on a proprietary algorithm. Google’s technology for ranking Web pages is called PageRank The company growth gradually because of the index of the Websites and other online content that they made it accessible through their search engine to everybody who has access to internet. The company offers different types of useful search. Today, Google operates the leading Internet search engine, by offering very precise search results from actually billions of Web pages. The company is...

Words: 2917 - Pages: 12

Premium Essay

Go W/ Flow

...Accounting 381 Project 2: Go with the Flow Case Study (15 points) Due: Thursday, March 10 (at beginning of class). Also, please be prepared to discuss the case and your group’s solution in class on this date. Groups: Please work in groups of 3-5 students (submit 1 discussion per group). You may select your own groups. Please contact me if you are having difficulty finding a group. Required: Prepare a discussion outlining the alternatives for determining the appropriate cash flow statement classification for Go with the Flow’s insurance settlement proceeds, sale of accounts receivable, and acquisition of property, plant, and equipment on account. Relying on the applicable guidance, discuss the appropriate way for Go with the Flow’s to classify these transactions. Your discussion should include cites to the applicable guidance and how it applies to Go with the Flow’s transactions. Your discussion should be no more than 4 pages in length. Applicable Professional Pronouncements ASC 230, Statement of Cash Flows (formerly FASB Statement No. 95, Statement of Cash Flows) ASC 320, Investments — Debt and Equity Securities (formerly FASB Statement No. 115, Accounting for Certain Investments in Debt and Equity Securities) You may access the FASB Codification database through the American Accounting Association by logging in at using the following: User ID: AAA51686 Password: SLb736y Additional Notes 1. Insurance...

Words: 858 - Pages: 4