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kompoz [17]
3 years ago
7

A machine with a cost of $144,000, current year depreciation expense of $20,500 and accumulated depreciation of $92,000 is sold

for $45,600 cash. The total amount that should be reported in the operating section of the statement of cash flow in, indirect method is: a. $20,500. b. $4,560. c. $66,100. d. $18,900. e. $26,900.
Business
1 answer:
Svetllana [295]3 years ago
5 0

Answer:

a. $20,500

Explanation:

The cashflow using the indirect method has basically 3 segments namely; Cashflow from operating activities, Cashflow from investing activities and Cashflow from financing activities.

Cashflow from operating activities considers the net profit before tax and then adjustments for non cash items like depreciation. Hence from the question given, the current year depreciation ($20,500) is a part of the Cashflow from operating activities.

Other cost elements stated in the question are considered under investing activities.

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Q 4.24: At the end of March, Paul’s Painting hired five temporary employees to work on a project that began on April 5 and ended
Nookie1986 [14]

Answer:

At the end of March, Paul’s Painting hired five temporary employees to work on a project that began on April 5 and ended on April 28. Paul’s received 100% of the total payment for the project on May 3. In this situation, both cash basis accounting and GAAP require that Paul’s recognize the employees’ total salary expense in April.

Explanation:

A collection of accounting rules and standards usually followed, for financial reporting is known as GAAP (generally accepted accounting principles) .

For businesses, GAAP needs accrual accounting.

Accrual accounting operates on the basis of matching both revenue and expenses. Revenues and the related expenses occur concurrently, though the cash transaction concerning thereto might happen in some other period.

In the situation given in the question, the revenue from the project is earned in April, subsequently, the salary expense related to that work should also be recognized in the same period due to an accrual basis.

7 0
3 years ago
Read 2 more answers
Freeman Company's accounting records include the following information: Payments to suppliers $ 47,000 Collections on accounts r
Mashutka [201]

Answer:

$73,600

Explanation:

Cash flow from Operating Activity

Cash sales                                                          $26,000

Collections on accounts receivable                 $99,000

Payments to suppliers                                      ($47,000)

Cash generated from operations                     $78,000

Income taxes paid                                              ($4,400)

Net cash provided by operating activities       $73,600

therefore,

the amount of net cash provided by operating activities indicated by these transactions is $73,600

4 0
2 years ago
When manufacturing overhead costs are assigned to production in a process cost system, it means that
Colt1911 [192]

Answer:

<em>When manufacturing overhead costs are assigned to production in a process cost system, it means that the business uses absorption costing system.</em>

Explanation:

When manufacturing overhead costs are assigned to production in a process cost system, it means that the business uses absorption costing system.

Absorption costing system is that where units of products and inventories are valued using full cost. Full cost implies that each product would be charged for an amount of the<em> fixed production overhead </em>in addition to the variable cost.

The fixed overhead is charged using a predetermined overhead absorption rate.

8 0
3 years ago
The _____ market is a market in which the demand for and supply of money determine an interest rate or opportunity cost of holdi
jek_recluse [69]

Answer:

Money

Explanation:

4 0
3 years ago
Lake Co. receives nonrefundable advance payments with special orders for containers constructed to customer specifications. Rela
klasskru [66]

Solution :

We calculate the advances form the customer to be reported as the current liability as on Dec. 31, 2009 in the balance sheet as follows :

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

Customer advances the balance Dec 31, 2008                           110

Add : advances that is  received with 2009 orders is                 195

Less : advances applicable to the orders in 2009                      -180

Less : advances from orders that are canceled in 2009          <u>  -45  </u>

Advances from the customers liability Dec. 31, 2009                  80

Therefore, the advance from the customer to be reported in the balance sheet as the current liability is $80.

6 0
2 years ago
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