PSY 480 Week 3 Assignment Application of Clinical Psychology Paper
October 31, 2020
worksheet hcs
October 31, 2020

Comparative Analysis Case
The Coca-Cola Company and PepsiCo, Inc.
The financial statements of Coca-Cola and PepsiCo are presented in Appendices C and D, respectively. The companies’ complete annual reports, including the notes to the financial statements, are available online.
Instructions
Use the companies’ financial information to answer the following questions.
(a)What method of computing net cash provided by operating activities does Coca-Cola use? What method does PepsiCo use? What were the amounts of cash provided by operating activities reported by Coca-Cola and PepsiCo in 2014?
(b)What was the most significant item reported by Coca-Cola and PepsiCo in 2014 in their investing activities sections? What is the most significant item reported by Coca-Cola and PepsiCo in 2014 in their financing activities sections?
(c)What were these two companies’ trends in net cash provided by operating activities over the period 2012 to 2014?
(d)Where is “depreciation and amortization” reported by Coca-Cola and PepsiCo in their statements of cash flows? What is the amount and why does it appear in that section of the statement of cash flows?
(e)Based on the information contained in Coca-Cola’s and PepsiCo’s financial statements, compute the following 2014 ratios for each company. These ratios require the use of statement of cash flows data. (These ratios were covered in Chapter 5.)
(1)   Current cash debt coverage.
(2)   Cash debt coverage.
(f)What conclusions concerning the management of cash can be drawn from the ratios computed in (e)?
CA5-5 WRITING (Cash Flow Analysis) The partner in charge of the Kappeler Corporation audit comes by your desk and leaves a letter he has started to the CEO and a copy of the cash flow statement for the year ended December 31, 2017. Because he must leave on an emergency, he asks you to finish the letter by explaining: (1) the disparity between net income and cash flow, (2) the importance of operating cash flow, (3) the renewable source(s) of cash flow, and (4) possible suggestions to improve the cash position.

KAPPELER CORPORATIONStatement of Cash FlowsFor the Year Ended December 31, 2017

Cash flows from operating activities

Net income

$ 100,000 

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation expense

$ 10,000 

Amortization expense

1,000 

Loss on sale of fixed assets

5,000 

Increase in accounts receivable (net)

(40,000)

Increase in inventory

(35,000)

Decrease in accounts payable

 (41,000)

 (100,000)

Net cash provided by operating activities

-0-

Cash flows from investing activities

Sale of plant assets

25,000 

Purchase of equipment

(100,000)

Purchase of land

 (200,000)

Net cash used by investing activities

(275,000)

Cash flows from financing activities

Payment of dividends

(10,000)

Redemption of bonds

 (100,000)

Net cash used by financing activities

 (110,000)

Net decrease in cash

(385,000)

Cash balance, January 1, 2017

  400,000 

Cash balance, December 31, 2017

$  15,000 

Date
President Kappeler, CEOKappeler Corporation125 Wall StreetMiddleton, Kansas 67458
Dear Mr. Kappeler:
I have good news and bad news about the financial statements for the year ended December 31, 2017. The good news is that net income of $100,000 is close to what we predicted in the strategic plan last year, indicating strong performance this year. The bad news is that the cash balance is seriously low. Enclosed is the Statement of Cash Flows, which best illustrates how both of these situations occurred simultaneously . . .
Instructions
Complete the letter to the CEO, including the four components requested by your boss.
P6-12 (LO5) ETHICS (Pension Funding) Craig Brokaw, newly appointed controller of STL, is considering ways to reduce his company’s expenditures on annual pension costs. One way to do this is to switch STL’s pension fund assets from First Security to NET Life. STL is a very well-respected computer manufacturer that recently has experienced a sharp decline in its financial performance for the first time in its 25-year history. Despite financial problems, STL still is committed to providing its employees with good pension and postretirement health benefits.
Under its present plan with First Security, STL is obligated to pay $43 million to meet the expected value of future pension benefits that are payable to employees as an annuity upon their retirement from the company. On the other hand, NET Life requires STL to pay only $35 million for identical future pension benefits. First Security is one of the oldest and most reputable insurance companies in North America. NET Life has a much weaker reputation in the insurance industry. In pondering the significant difference in annual pension costs, Brokaw asks himself, “Is this too good to be true?”
Instructions
Answer the following questions.
(a)Why might NET Life’s pension cost requirement be $8 million less than First Security’s requirement for the same future value?
(b)What ethical issues should Craig Brokaw consider before switching STL’s pension fund assets?
(c)Who are the stakeholders that could be affected by Brokaw’s decision?
 
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