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1 year ago

How would a company's working capital be affected if a substantial amount of accounts payable were paid in cash?

1 answer:

3 0

If a company pays most of the major payments through cash it means its cash flow will be reduced due to the company’s working capital will also reduce but the current liabilities will remain unchanged.

Cash flow includes in Current assets of the company and is considered to be the strength of the company's working capital. therefore with the cash payments company's current assets will reduce and this reduction weakens working capital.

For example, Individual A pays most of the payments through cash and his current assets are being reduced due to that his working capital would also reduce with its cash flow but the liabilities will remain unchanged as they are long-term debt.

Liabilities are of more than a year or about a year due to that they’ll not affect the current assets of the company and this will not affect its working capital.

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Flounder Inc. issues 500 shares of $10 par value common stock and 100 shares of $100 par value preferred stock for a lump sum of

ipn [44]

Answer:

Journal Entries

Dr. Cash ___________________$104,000

Cr. Common Stock ___________$5,000

Cr. Preferred stock ___________$10,000

Cr. Paid in capital Common Stock $78,200

Cr. Paid in capital Preferred stock $10,800

Dr. Cash ___________________$104,000

Cr. Common Stock ___________$5,000

Cr. Preferred stock ___________$10,000

Cr. Paid in capital Common Stock $84,000

Cr. Paid in capital Preferred stock $5,000

Explanation:

First, we need to calculate the fair value of each type of shares using the following formula

Fair value = Numbers of shares x Fair value per share

Fair Value of Common Share = 500 shares x $164 per share = $82,000

Fair value of preferred share = 100 shares x $205 per share = $20,500

Total value of shares = $82,000 + $20,500 = $102,500

Now allocate the Value of $104,000 bases on the fair value

Allocation to

Common stock = $104,000 x $82,000 / $102,500 = $83,200

Preferred stock = $104,000 x $20,500 / $102,500 = $20,800

Now calculate the par values

Par Values

Common stock = 500 shares x $10 = $5,000

Preferred stock = 100 shares x $100 = $10,000

Now calculate the additional paid-in capital

Additional paid-in capital

Common stock = $83,200 - $5,000 = $78,200

Preferred stock = $20,800 - $10,000 = $10,800

Value of common stock = $178 per share x 500 shares = $89,000

Additional paid in capital

Common stock = $89,000 - $5,000 = $84,000

Preferred stock = $104,000 - $89,000 - $10,000 = $10,000

6 0

2 years ago

Which of the following describes what is identified by a supply schedule?

Anika [276]

Answer: Which of the following describes what is identified by a supply schedule?

How much suppliers will profit at various prices

How much consumers will save at various supply levels

How much suppliers will raise prices as production varies

How much of a product suppliers will produce at various prices

Explanation: A supply schedule is a table that shows the quantity supplied at each price. A supply curve is a graph that shows the quantity supplied at each price. Sometimes the supply curve is called a supply schedule because it is a graphical representation of the supply schedule.

6 0

2 years ago

Read 2 more answers

The chart below shows an exchange rate table.

Goryan [66]

Answer:

the answer is (d) euro. might be wrong tho i dont know

sry...

6 0

2 years ago

Read 2 more answers

Colliers, Incorporated, has 100,000 shares of cumulative preferred stock outstanding. The preferred stock pays dividends in the

VladimirAG [237]

a. The amount that will go to the preferred stockholders is $400,000.

b. The amount of the declared dividend that will be available for common stock dividends is $200,000 ($600,000 - $400,000).

Data and Calculations:

Cumulative Preferred Stock Outstanding = 100,000 shares

Dividends per share = $2

Cumulative Preferred Dividend last year = $200,000 (100,000 x $2)

Preferred Dividend this year = $200,000 (100,000 x $2)

Total preferred dividend to be paid this year = $400,000

Thus, the Preferred Stockholders will be paid $400,000 ($200,000 for last year and $200,000 for this year).

Learn more: brainly.com/question/24297088

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2 years ago

Elizabeth Kennedy sells beauty supplies. Her annual demand for a particular skin sparkle is 17,000 units. The cost of placing an

elena-s [515]

Answer:

The minimum cost will be "$214085".

Explanation:

$D = 1700 units \\\\S = \$ 50 \\\\H= 20%\\$

i) When quantity = 1-1500, price = $ 12.50 , and holding price is $12.50 * 20 %= $2.50.

ii) When quantity = 1501 -10,000, price = $ 12.45 , and holding price is $12.45 * 20 %= $2.49.

iii) When quantity = 10,0001- and more, price = $ 12.40 , and holding price is $12.40 * 20 %= $2.48.

$EOQ= \sqrt{\frac{2DS}{H}} \\\\EOQ1= \sqrt{\frac{2\times 17000\times 50}{2.50}} \\\\EOQ1=824.62 \ \ \ or \ \ \ 825\\$

$EOQ2= \sqrt{\frac{2\times 17000\times 50}{2.49}} \\\\EOQ1=826.2T \ \ \ or \ \ \ 826\\$

$EOQ3= \sqrt{\frac{2\times 17000\times 50}{2.48}} \\\\EOQ3=827.93 \ \ \ or \ \ \ 828\\$

know we should calculate the total cost of EOQ1 and break ever points (1501 to 10,000)units

$total \ cost = odering \ cost + holding \ cost + \ Annual \ product \ cost\\\\total_c = \frac{D}{Q} \times S + \frac{Q}{2} \times H + (p \times D) \\\\T_c = \frac{17000}{825} \times 50+ \frac{825}{2} \times 2.50 + (12.50 \times 17000)\\\\T_c = 1030 .30 +1031.25+212500\\\\T_c =$ 214561.55\\\\$

$T_c = \frac{17000}{1501} \times 50+ \frac{1501}{2} \times 2.49 + (12.45 \times 17000)\\\\T_c = 566.28 +1868.74+211650\\\\T_c =$ 214085.02 \ \ \ or \ \ \ $ 214085\\\\$

$T_c = \frac{17000}{10001} \times 50+ \frac{10001}{2} \times 2.48 + (12.40 \times 17000)\\\\T_c = 84.99+ 12401.24+210800\\\\T_c =$ 223286.23 \\$

The total cost is less then 15001. So, optimal order quantity is 1501, that's why cost is = $214085.

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3 years ago