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sammy [17]
3 years ago
5

Tax savings generated from deductions are considered cash inflows.

Business
1 answer:
lubasha [3.4K]3 years ago
3 0
Tax savings generated from deductions are considered cash inflows.

Answer: false

Hope this helps
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Shamrock Company had the following information available at the end of 2014.
mars1129 [50]

Answer and Explanation:

The preparation is presented below:      

                                                Shamrock Company

                                            Statement of Cash Flows

                                 For the Year Ended December 31, 2014

                                                  (Direct Method)

Cash flows from operating activities

Cash receipts:  

Cash received from customers $1,153,660  

Dividends received                 $2,500

Total cash receipts                         $1,156,160

Cash payments:  

Cash paid to suppliers                  $762,690  

Cash paid for operating expenses $225,230  

Taxes paid                                     $39,920  

Interest paid                                       $61,776

Total cash payments                           -$1,089,616

Net cash provided by operating activities  $66,544

Cash flows from investing activities  

Sale of short-term investments $14,080  

Sale of land $55,590  

Purchase of equipment -$124,570  

Net cash used by investing activities  -$54,900

Cash flows from financing activities  

Proceeds from issuance of common stock $29,526  

Principal payment on long-term debt -$9,580  

Dividends paid -$23,890  

Net cash used by financing activities  -$3,944

Net increase in cash  $7,700

Cash, January 1, 2014  $3,060

Cash, December 31, 2014  $10,760

Working notes

Sales Revenue $1,160,450  

– Increase in Accounts Receivable $6,790  

Cash received from customers $1,153,660  

Cost of Goods Sold $748,980  

+ Increase in Inventory $5,020  

+ Decrease in Accounts Payable $8,690  

Cash paid to suppliers $762,690  

Operating Expenses $275,640  

– Depreciation/Amortization Expense -$39,330  

– Decrease in Prepaid Rent -$110,80  

+ Increase in Prepaid Insurance $1,640  

+ Increase in Office Supplies $520  

– Increase in Wages Payable -$2,160  

Cash paid for Operating Expenses $225,230  

Income tax expense $40,350  

Less:Increase in income taxes payable -$430  

Taxes paid $39,920  

Interest Expense $52,270  

+ Decrease in Bond Premium $9,506  

Interest paid $61,776  

Reconciliation of Net Income to Net Cash Provided by Operating Activities:  

Net income  $58,420

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

Add: Depreciation expense $39,330  

Add: Decrease in prepaid rent $110,80  

Add: Increase in income taxes payable $430  

Add: Increase in wages payable $2,160  

Less: Increase in accounts receivable -$6,790  

Less: Increase in inventory -$5,020  

Less: Increase in prepaid insurance -$1,640  

Less: Increase in office supplies -$520  

Less: Decrease in accounts payable -$8,690  

Less: Gain on sale of land -$8,320  

Less: Gain on sale of short-term investments -$4,390  

Less: Amortization of bond premium -$9,506  

Total adjustments  $8,124

Net cash provided by operating activities  $66,544

8 0
3 years ago
Haberdash inc. last year reported sales of $12 million and an inventory turnover ratio of 3. the company is now adopting a just-
Sindrei [870]

<span>Sales = $12,000,000</span>

<span> <span>Inventory Turnover ratio (old) = 3
</span><span>Inventory Turnover ratio (new) = 7.5
</span><span>Freed up Cash = ?
</span><span>So, let’s find out the freed up cash
<span> <span>We know level of inventory are calculated as follows;</span>
<span>Inventory = Sales Inventory turnover ratio</span>
<span>Calculating $ value of old inventory
<span> <span>Inventory Old=$12,000.0003
</span> <span><span>                         =</span>$7.5,000,000</span>
<span>  Calculating $ value of New inventory
<span> <span>Inventory New=$12,000,0075
</span> <span><span>                        =</span>$3,000,000</span>
<span> <span>The freed up cash would be=Old Inventory – New Inventory</span>
<span> <span>=$7.5,000,000 - $3,000,000
</span><span>=<span>$4.5,000,000</span></span></span></span></span></span></span></span></span></span></span>
6 0
3 years ago
Read 2 more answers
Cullumber Company received proceeds of $1176000 on 10-year, 6% bonds issued on January 1, 2019. The bonds had a face value of $1
Alik [6]

Answer:

$74,880

Explanation:

The computation of the amount of interest Cullumber must pay the bondholders is shown below:

= Face value of the bond × interest rate

where,

Face value of the bond is $1,248,000

And the interest rate is 6%

So, the amount of interest paid is

= $1,248,000 × 6%

= $74,880

We simply multiplied the face value of the bond with the interest rate so that the amount of interest expense could come

6 0
2 years ago
David needed money for some unexpected expenses, so he borrowed $3,695.17 from a friend and agreed to repay the loan in five equ
Nataly_w [17]

Answer:

11% is the implied interest.

Explanation:

3 0
2 years ago
Read 2 more answers
Is it okay to write 350 words when the limit is 500 for a college essay?
Novosadov [1.4K]
You should always try to meet the word limit
3 0
2 years ago
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