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3 years ago

What amount should Dunbarn report as cash provided (used) by investing activities in its statement of cash flows for the year

Business

1 answer:

Naddik [55]3 years ago

6 0

Complete Question:

Dunbarn Co. had the following activities during the year:

Purchase of inventory$120,000

Purchase of equipment 80,000

Purchase of available-for-sale securities 60,000

Purchase of treasury stock 70,000

Issuance of common stock 150,000

What amount should Dunbarn report as cash provided (used) by investing activities in its statement of cash flows for the year?A. $(120,000)B. $(140,000)C. $(210,000)D. $150,000

Answer:

Dunbarn Co.

The amount Dunbarn Ltd should report as cash provided (used) by investing activities in its statement of cash flows for the year is:

B. $(140,000)

Explanation:

a) Investing outflows:

Purchase of equipment $80,000

Purchase of available-for-sale securities 60,000

Total spent on investing activities $140,000

b) Investing activities are the financial activities that an entity engages in to increase its stock of owned resources. They include cash inflows and outflows around the acquisition of long-term assets and securities. These are investments made so that the firm can generate more resources for itself. The purchase of inventory falls under operating activities, as inventory forms part of the main business of the entity. The purchase of treasury stock and issuance of common stock are classified as financing activities and not investing activities. This leaves the purchase of equipment and available-for-sale securities as the only investing activities during the year.

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At an output level of 415,400 units, you have calculated that the degree of operating leverage is 2.00. The operating cash flow

katen-ka-za [31]

Answer:

the new degree of operating leverage for output levels of 16,400 units and 14,400 units will be -0.0858 and - 0.0745 respectively.

Explanation:

From the given information:

the degree of operating the leverage at 415,400 units = $\mathtt{\dfrac{contribution \ \ margin}{operating \ \ income}}$

where contribution margin = 2 × 58000 =116000

If we assume that the sales price should be p and the variable cost be q per unit .

Then, 415,400p - 415,400q = 116000

p - q = $\mathtt{\dfrac{116000}{415400}}$

p - q = 0.279 at 415400 unit

Contribution margin = 415400 × 0.279

Contribution margin = 115896.6

The operating income = contribution margin - fixed expense

58000 = 115896.6 - fixed expense

fixed expense = 115896.6 - 58000

fixed expense = 57896.6

However, when the output level is 16400 unit,

the contribution margin = 16400(p-q)

the contribution margin = 16400(0.279)

the contribution margin = 4575.6

The operating leverage = $\mathtt{\dfrac{contribution \ \ margin}{contribution \ \ margin - fixed \ \ costs}}$

The operating leverage = $\mathtt{\dfrac{4575.6}{4575.6 - 57896.6}}$

The operating leverage = $\mathtt{\dfrac{4575.6}{-53321}}$

The operating leverage = -0.0858

when the output level is 14400 unit,

the contribution margin = 14400(p-q)

the contribution margin = 14400(0.279)

the contribution margin = 4017.6

The operating leverage = $\mathtt{\dfrac{contribution \ \ margin}{contribution \ \ margin - fixed \ \ costs}}$

The operating leverage = $\mathtt{\dfrac{4017.6}{4017.6 - 57896.6}}$

The operating leverage = $\mathtt{\dfrac{4017.6}{-53879}}$

The operating leverage = - 0.0745

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3 years ago

Which of these assumptions is often realistic for a firm in the short run? a. The firm can vary both the size of its factory and

Romashka-Z-Leto [24]

Answer:

The correct option here is C) the number of workers can be varied but not size of factory.

Explanation:

In the short run it would not be possible to shift or vary the size of factory and even if they try doing that it will talk lot of time and cost , which is in no way beneficial for the firm. But what firm can do is vary the number of workers they employ, like if they want to take advantage of economies of scale , they can do that by assigning less tasks to employees and for that they can make changes in the number of employees as per the requirement.

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3 years ago

Why does supply decrease when the price<br> of resources increases?

krek1111 [17]

Answer:

see below

Explanation:

Resources are the ( inputs) materials used in the production of goods meant for sale. The cost of inputs has a direct impact on the price of the finished goods(output). An increase in the cost of inputs increases the cost of production. An increase in production cost increases without a corresponding rise in the selling price means that the profits margin per unit will decline.

Suppliers are motivated to sell or deliver more quantities in the market by profit prospects. An increase in the costs of inputs decreases profit margins. Reduced profits margin result in suppliers supplying reduced quantities in the markets.

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3 years ago

One thing that distinguishes the short run and the long run is?

Andrej [43]

A. the existence of at least one fixed input is the primary difference between short run and long run. It is because in the long run, the quantities of all inputs can be varied.

In economics, the short run can be defined as a concept that states that, within a certain period in the future. In the short run the others are variable while at least one input is fixed. In the other side, long run in economics can be defined as a theoretical concept in which all prices and quantities have fully adjusted and all markets are in equilibrium.

Learn more about long run here brainly.com/question/17029465

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1 year ago

You work for Emerita's Pizzeria and have been given the task of looking at company goals and deciding how the goals will be acco

Vesna [10]

The plans that must be involved are the strategic planning, the mid level, the low level, the operational planning, the top level planning.

Explanation:

In the strategic planning the company's stakeholders will ask them were they want their company to be in five years

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A meeting will be held with the top level staff and hence they will be coming up with the new tools of the operational planning

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3 years ago