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Nikitich [7]
3 years ago
15

Three categories of activities (operating, investing, and financing) generate or use the cash flow in a company. In the followin

g , identify which type of activity is described by each statement. (Operating Activity Investing Activity Financing Activity)
a. Yum Co. uses cash to repurchase 10% of its common stock.
b. DigiInk Printing Co. buys new machinery to ramp up its production capacity.
c. D and W Co. sells its last season’s inventory to a discount store.
d. A company records a loss of $70,000 on the sale of its outdated inventory.
Business
1 answer:
Marat540 [252]3 years ago
3 0

Answer:

a. Yum Co. uses cash to repurchase 10% of its common stock. (Financing activity)

b. DigiInk Printing Co. buys new machinery to ramp up its production capacity. (Investing activity)

c. D and W Co. sells its last season’s inventory to a discount store. (Operating activity)

d. A company records a loss of $70,000 on the sale of its outdated inventory. (Operating activity)

Explanation:

Cash flow statement shows how cash is used and obtained in a business. There are different activities that influence cash flow. Below are the activities:

- Operating activities are those that include normal business operations like buying and selling of inventory, interest payments, and salaries.

- Investing activities involves use of cash for investment like purchase or sale of assets, merger and acquisitions payments, and purchase of equipment.

- Financing activities includes cash used to purchase or sell equity such as shares, payment of dividends, and repayment of principal from debt

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During the year, Bonita Industries made an entry to write off a $33300 uncollectible account. Before this entry was made, the ba
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Answer:

Net Accounts Receivable $363300

When the allowance for uncollectibles is maintained the allowance for uncollectibles method is used in which allowance for uncollectibles is deducted from the accounts receivables.

Explanation:

If the method of allowance for uncollectibles is used the amount of allowance for uncollectibles is deducted from the accounts receivables.

Bonita Industries

Accounts Receivable  $397000

Less Allowance For  Uncollectible $33700

Net Accounts Receivable $363300

IF the direct write off method is used the bad debts are directly deducted from the accounts receivable.

Bonita Industries

Accounts Receivable  $397000

Less Uncollectibles $33300

Net Accounts Receivable $363700

5 0
3 years ago
A firm expects to increase its annual dividend by 20 percent per year for the next two years and by 15 percent per year for the
Law Incorporation [45]

Answer:

Current price = $20.50

Explanation:

Data provided in the question;

Growth rate, g = 20% = 0.2 for the 2 years

Growth rate, g' = 15% = 0.15 for the following 2 years

after 4 years annual dividend = $3

Last dividend paid, D0 = $1

Required rate of return, r = 12% = 0.12

Now,

D1 = D0 × (1 + g)

= $1 × (1 + 0.2)

= $1.2

D2 = $1 × (1 + 0.2)²

D3 = $1 × (1 + 0.2)² × (1 + 0.15)

D4 = $1 × (1 + 0.2)²  × (1 + 0.15)²

D5 = 3

Therefore,

Current price = \frac{1.2}{(1 + 0.12)} + \frac{\$1\times(1 + 0.2)^2}{(1 + 0.12)^2} + \frac{\$1\times(1 + 0.2)^2\times(1 + 0.15)}{(1 + 0.12)^3} + \frac{\$1\times(1 + 0.2)^2\times(1 + 0.15)^2}{(1 + 0.12)^4} + \frac{\frac{\$3}{0.12}}{(1+0.12)^4}

⇒ Current price = $20.50

6 0
3 years ago
If you're renting a house or apartment, you only need renter's insurance for the first few months.
tensa zangetsu [6.8K]

Answer:

You'll only need renters insurance if your landlord or your building requires it. While not required otherwise, anyone renting any type of residence long-term—be it an apartment or single-family home—should strongly consider purchasing a renters insurance policy.

4 0
3 years ago
Max Company uses 20,000 units of Part A in producing its products. A supplier offers to make Part A for $7. Max Company has rele
Vadim26 [7]

Answer:

$20,000

Explanation:

Max company makes use of 20,000 units of part A to manufacture its product

A supplier offers to produce part A for $7

Max company has relevant costs to $8 per unit to produce part A

Therefore, the opportunity cost of not buying part A from the supplier can be calculated as follows

Opportunity cost= 20,000 units of part A($8-$7)

= 20,000 units×$1

= 20,000×$1

= $20,000

Hence the opportunity cost of not buying part A from the supplier when there is excess capacity is $20,000

6 0
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When leaving a job, desirable knowledge employees are most likely to find new employment on Internet career sites and go alone t
schepotkina [342]

Answer:True

Explanation:

3 0
3 years ago
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