Computation of Cash Flows
an Analysis of Changes in Selected

question 82

Essay

Computation of cash flows
An analysis of changes in selected statement of financial position accounts of Tam Corporation shows the following for the current year:
$\begin{array}{|l|l|}\hline \text { Equity Securities account } & \\\hline \text { Debit entries } & \$ 1,600,000 \\\hline \text { Credit entries } & \$ 1,000,000 \\\hline \text { Property, Plant, and Equipment accounts: } & \\\hline \text { Debit entries to asset accounts } & \$ 3,600,000 \\\hline \text { Credit entries to asset accounts } & \$ 2,800,000 \\\hline \text { Debit entries to accumulated depreciation accounts } & \$ 1,300,000\\\text { (resulting from sale of PPE assets) }\\\hline \begin{array}{c}\text { Credit entries to accumulated depreciation accounts } \\\text { (representing depreciation for the current year) }\end{array} & \$ 500,000 \\\hline\end{array}$ The income statement for the current year included the following items relating to the transactions summarized above:
$\begin{array}{|l|l|}\hline \text { Loss on sale of equity securities } & \$ 350,000 \\\hline \text { Gain on sale of property, plant, and equipment } & \$ 650,000\\\hline\end{array}$ All payments and proceeds relating to these transactions were in cash. Using this information, compute the following cash flows for the current year:
$$\begin{array} { | l | l | } \hline \text { (a) Purchases of equity securities } & \$ \\\hline \text { (b) Proceeds from sale of equity securities } & \$ \\\hline \text { (c) Purchases of property, plant, and equipment } & \$ \\\hline \text { (d) Proceeds from sale of property, plart, and equipment } & \$ \\\hline\end{array}$$

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Definitions:

Inventory Control

The management of inventory levels to ensure that the right amount of stock is available at the right time and place, minimizing costs and meeting customer demand.

MAD

Mean Absolute Deviation, a statistic that measures the average absolute deviation of observed values from their mean.

MSE

Mean Squared Error (MSE) is a measure used in statistics to quantify the average of the squares of the errors or deviations between estimated and actual values.

MAPE

Mean Absolute Percentage Error, a measure used to assess the accuracy of forecast models by calculating the average absolute percent error between predicted and observed values.