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allsm [11]
3 years ago
10

[21] Bear Co. prepares its statement of cash flows using the indirect method. Bear sold equipment with a carrying value of $500,

000 for cash of $400,000. How should Bear report the transaction in the operating and investing activities sections of its statement of cash flows? Operating Activities Investing Activities
A. $100,000 addition to net income $400,000 cash inflow
B. $100,000 subtraction from net income $400,000 cash inflow
C. $100,000 addition to net income $500,000 cash inflow
D. $100,000 subtraction from net income $500,000 cash inflow
Business
1 answer:
ehidna [41]3 years ago
8 0

Answer:

B. $100,000 subtraction from net income $400,000 cash inflow

Explanation:

The income statment will include a loss on disposal.

The book value is 500,000 and was sold at 400,000

The loss on disposal will be 100,000

For the cash flow statement will recognize the cash proceeds from investment activities. It will ignore the loss on disposal. Cash generated on disposal of equipment will be 400,000

A.- INCORRECT the net income decrease, as it was a loss, not a gain.

C.- INCORRECT the net income decrease, as it was a loss, not a gain.

D.- INCORRECT the cash flow will recognize the amount of cash received. Which is 400,000 not 500,000.

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When the economy is growing, total output is _____ and total income is _____.
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Increasing ,increasing
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Consider the market for portable air conditioners in equilibrium. A summer of unseasonably cool weather would cause:
RSB [31]
C.

First consider the effects on demand and supply. What will occr is that demand will decrease and the curve will shift to the left. As a result, if you draw the diagram out, equilibrium price and quantity will decrease.
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3 years ago
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Kohler Corporation reports the following components of stockholders’ equity at December 31, 2018. Common stock—$20 par value, 10
gogolik [260]

Answer:

1. See the attached excel file for the journal entries.

2. Ending balance of retained earning is $346,125

3.Total Stockholder's Equity is $1,616,125

Explanation:

1. Prepare journal entries to record each of these transactions.

Note: See the attached excel file for the journal entries.

The following are tge workings:

w.1: Treasury stock = $5,000 * $20 = $10,000

w.2: Dividend payable = (Issued and outstanding shares - Shares repurchase) * Dividend per share = (60,000 - 5,000) * $4 = 55,000 * $4 = $220,000

w.3: Cash = Number of shares sold * Selling price per share = 1,875 * $24 = $45,000

w.4 = Treasury stock = Number of shares sold * Treasury price per share = 1,875 * $20 = $37,500

w.5: Additional paid in capital = Number of shares sold * (Selling price per share - Treasury price per share) = 1,875 * ($24 - $20) = $7,500

w.6: Cash = Number of shares sold * Selling price per share = 3,125 * $17 = $53,125

w.7 = Treasury stock = Number of shares sold * Treasury price per share = 3,125 * $20 = $62,500

w.8: Balancing figure = Treasury stock (w.7) – Cash (w.7) - Additional paid in capital (w.5) = $62,500 - $53,125 - $7,500 = $1,875

w.9: Dividend payable = (Issued and outstanding shares * Dividend per share = 60,000 * $4 = $240,000

2. Prepare a statement of retained earnings for the year ended December 31, 2019.

Kohler Corporation

Statement of Retained Earnings

On December 31, 2019

<u>Particulars                                                  Amount ($)  </u>

Opening balance                                       400,000

Income for the year                                    408,000  

Dividend Paid (220,000 + 240,000)        (460,000)

Loss on sale of treasury stock               <u>        (1,875)    </u>

Ending balance                                     <u>      346,125   </u>

3. Prepare the stockholders’ equity section of the company’s balance sheet as of December 31, 2019.

Kohler Corporation

Stockholder Equity Section of Balance sheet

At December 31, 2019

<u>Particulars                                                        Amount ($)</u>

Common stock issued ($20 * 60,000)               1,200,000

Paid-in capital in excess of par v - c. stock     <u>        70,000  </u>

Total contributed Capital                                     1,270,000

Retained Earnings                                      <u>      346,125  </u>

Total Stockholder's Equity                             <u>     1,616,125  </u>

Download xlsx
3 0
3 years ago
A project will produce an operating cash flow of $56,200 a year for 5 years. The initial fixed asset investment in the project w
Lelu [443]

Answer :

Net present value = -$18,375

Explanation :

As per the data given in the question,

Initial investment = $239,800

The project will generate operating cash flow pf $56,200 for 5 years

So present value of operating cash flow :

PMT = $56,200

N = 5 years

Rate = 15.2%

FV = $0

Now applying the formula

= -PV(RATE,NPER,PMT,FV,0)

The present value comes $187,502

Now

FV = $67,000

n = 5 years

Rate = 15.2%

PMT = $0

Now applying the formula

= -PV(RATE,NPER,PMT,FV,0)

The present value comes $33,023

Now the Net present value is

= ($33,023 + $187,502) - $238,900

= -$18,375

5 0
3 years ago
Which statement reports the changes in shareholders' equity during the period that were not a result of transactions by owners.
guajiro [1.7K]

Answer:

the statement of comprehensive income

Explanation:

The statement of comprehensive income refers to a summary in which the net assets are to be recognized for a particular period of time. It shows the adjustments made to the equity that would be highlighted also. Plus the net income could be determined by preparing an income statement

Therefore in the given case, the changes that are made in the stockholder equity would be come under the comprehensive income statement and the same is to be considered

3 0
3 years ago
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