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____ [38]
3 years ago
5

BuzzInc. sold a piece of equipment during the period for $230,000 and recorded a gain of $45,000 on the sale. How should this ga

in be treated when preparing the operating activities section of the statement of cash flows using the indirect method?
Business
1 answer:
WITCHER [35]3 years ago
3 0

Answer:

The gain should be deducted from net profit before tax and interest while calculating cash flows from operations and the cash proceeds is shown under investing activities as positive cash flow.

Explanation:

Since the cash flow is about actual cash received in period,the gain is irrelevant.But the gain must have been added in income statement in arriving at net income,hence in order to avoid double counting the gain impact should be eliminated whereas the cash received from the disposal is brought in down the line under investing activities as cash inflow.

The overall impact of this transaction on cash flow statement is illustrated below:

Gain                       -$45000

Cash proceeds       $230000

Net impact             $185000

The transaction has  $185000 impact on the cash flow statement as a whole.

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Roak Company and Clay Company are similar firms that operate in the same industry. Clay began operations 2 years ago and Roak st
babunello [35]

Answer: Clay Company

Explanation:

Based on the information given, the current, previous year and two previous years beforehand profit margins of Clay company are greater than the corresponding profit margins of Roak company.

This means that Clay company has a better profit margin and shows that they retain a higher percentage of their revenue after costs are taken out as opposed to Roak company.

8 0
3 years ago
You are the beneficiary of a life insurance policy. the insurance company offers two options for receiving the proceeds: a lump
r-ruslan [8.4K]
Take the $550 per month for monthly income as after ten years it would reach the same amount just in a longer period of time
8 0
3 years ago
During the year, Hamlet Inc. paid $22,000 to have bond certificates printed and engraved, paid $170,000 in legal fees, paid $9,0
xenn [34]

Answer:

$481,000

Explanation:

Bond issue costs are either direct or indirect costs:

  • direct costs include underwriting fees, listing fees, professional fees, compliance costs and other costs related to the IPO or APO (secondary issues), e.g printing costs
  • indirect costs include underpricing costs (IPO pricing is too low) and loss of proprietary information

Total bond issue costs = $22,000 + $170,000 + $9,000 + $280,000 = $481,000

5 0
3 years ago
On February 1, 2020, Bonita Industries purchased a parcel of land as a factory site for $328000. An old building on the property
Volgvan
I think is b I hope this helps
3 0
4 years ago
converting quarterly and annual business plans into broad output and labor requirements for the intermediate term is known as:
Nikitich [7]

Converting quarterly and annual business plans into broad output and labor requirements for the intermediate term is known as aggregate planning.

Aggregate planning is a method for developing a business by arranging a management to the production and demands. In this method, the quarterly and annual business plans are converted into broad output and labor requirements for the intermediate term. This intermediate term may last from 4 to 12 months.

In this period of time the company will hire new employees to make enough output to satisfy the demands and thereby maximizing the profit with a minimum cost.

Aggregate planning ensures the efficiency and production of a company. Usually it is done as a prior activity to obtain a continuous production facility.

Learn more about aggregate planning at brainly.com/question/18803972

#SPJ4

5 0
1 year ago
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