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3 years ago

Using the indirect method calculate the amount of net cash flows from operating activities from the following data.

Business

1 answer:

e-lub [12.9K]3 years ago

3 0

Answer:

Net cash: $199,600

Explanation:

First, we need to identify the increase and decrease in accounts:

+) Decrease in Account Payable = Beginning Account Payable - Ending Account Payable = 12,000 - 11,200 =$8,000

+) Decrease in Account Receivable = Beginning Account Receivable - Ending Account Receivable = 20,000 - 17,600 = $2,400

+) Increase in Prepaid Expense = Ending - Beginning = $5,600 - $4,000 = $1,600

Net cash flows from operating activities of the company can be calculated in indirect method as follow:

Net income $166,000

Adjustments to reconcile the net income to net cash flow from operating activities:

Decrease in account payable ($11,200)

Depreciation Expense $40,800

Amortization of intangible assets $3,200

Decrease in Account Receivable $2,400

Increase in Prepaid Expense ($1,600)

=> Net cash provided = Net income - Decrease in accountable + Depreciation Expense + Amortization of intangible assets + Decrease in Account Receivable - Increase in Prepaid Expense

= 166,000 - 11,200 + 40,800 + 3,200 + 2,400 - 1,600 = $199,600

Net cash: $199,600

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During the current year, Elk Company incurred the following direct labor costs: January $40,000 and February $60,000. Elk uses a

Rom4ik [11]

Answer:

January Overheads are under-applied by $2,000.

Explanation:

When,

Actual overheads > Applied overheads we say overheads are under-applied.

Actual overheads < Applied overheads we say overheads are over-applied.

Where,

Applied overheads = Predetermined overhead rate × Actual Activity

Therefore,

Applied overheads (January) = 120% × $40,000

= $48,000

Actual overheads (January) = $50,000.

Conclusion

It can be seen that from the above : Actual overheads : $50,000 > Applied overhead : $48,000, therefore overheads were under-applied.

Amount of under-applied overheads = $50,000 - $48,000

= $2,000

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3 years ago

Li Meng purchased a property that had been owned by the same man for more than 40 years. The title search was clean. In the spri

stira [4]

The covenant is against encumbrances.

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A claim made against a piece of property by someone who isn't the owner is called an encumbrance.

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1 year ago

A firm's marginal product of labor is 4 and its marginal product of capital is 5. If the firm adds one unit of labor but does n

marissa [1.9K]

Answer: C. use 0.8 fewer units of capital.

Explanation:

The Marginal Rate of Technical Substitution (MRTS) shows how much you can decrease capital or labor by in order to keep production constant if you increase either capital or labor.

It is calculated by the formula:

= Marginal product of labor / Marginal product of capital

= 4 / 5

= 0.8

The firm should use 0.8 fewer units of capital in order to maintain the same production level.

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3 years ago

The Evendale Store is just one of many stores owned and operated by the company. The Apparel Department is one of many departmen

ExtremeBDS [4]

Answer:

Direct cost for Apparel Department

Apparel Department cost of sales—Evendale Store $116,100

Apparel Department sales commission—Evendale Store $7,950

Apparel Department manager’s salary—Evendale Store $9,950

Total 134,000

Direct cost for Evendale Store

Apparel Department cost of sales—Evendale Store $116,100

Store manager’s salary—Evendale Store $18,300

Apparel Department sales commission—Evendale Store $7,950

Apparel Department manager’s salary—Evendale Store $9,950

Janitorial costs—Evendale Store $13,700

Total 166,000

Apparel Direct cost which are also variable

(change as object cost increase)

Apparel Department cost of sales—Evendale Store $116,100

Apparel Department sales commission—Evendale Store $7,950

Total 124,050

Explanation:

a) we should consider which cost are directly linked into Apparel department only.

b) here we have to determinate cost directly linked into Evendale Store

c) While in this case, besides looking for cost linked to Apparel department, they also need to be variable thus, changing with the object cost.

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3 years ago

A manufacturer of washing machines has expanded its plant and has created excess capacity, just as the general economy has taken

Lostsunrise [7]

Answer:

. b. offer rebates and incentives for customers who purchase washing machines.

Explanation:

Increasing the productive structure of a firm must be carefully planned. There needs to be demand and take into account the expectations of the economy. When a company increases its structure over an inadequate period, the strategy can be fatal, as firms typically go to great lengths to make investments. In the case described, the company now has an idle capacity, ie does not use all its productive infrastructure. This is compounded by the moment of narrated economic crisis. In this situation, the company is most likely to promote price incentives through discounts to stimulate demand for washing machines. Thus, the employer gets a breath to maintain its activities until the economy recovers and she can use all the installed capacity.

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3 years ago