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lara31 [8.8K]
3 years ago
6

Net income of Mansfield Company was $47,000. The accounting records reveal depreciation expense of $82,000 as well as increases

in prepaid rent, salaries payable, and income taxes payable of $62,000, $25,000, and $22,000, respectively. Prepare the cash flows from operating activities section of Mansfield's statement of cash flows using the indirect method.
Business
1 answer:
Helen [10]3 years ago
4 0

Answer:

Cash flows from operating activities

Net Income                                              $47,000

Add: Non cash Expense Adjustments:

Depreciation                                            $82,000

Change in Working Capital:

Prepaid rent                            ($62,000)

Salaries payable                      $25,000

Income taxes payable             <u>$22,000</u>

Less: Net Change in WC                         <u>$15,000</u>

Net Operating Cash flow                        <u>$114,000</u>

Explanation:

Cash Flow from operating activities cash generated from to day to day activities of the business. All the cash flows needed to operate the business smoothly.

Depreciation is a non cash expense deducted in the calculation of Net income.

Increase in Liability will provide the cash and increase in assets will use the cash. So, the increase in prepaid expense is classified as increase in Assets and Increase in the Salaries payable and Taxes payable are classified as the increase in liability.

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Stellar Corporation engaged in the following cash transactions during 2017. Sale of land and building $194,800 Purchase of treas
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Answer:

The cash provided by investing activities is $91900

Explanation:

The net cash provided or (used) by investing activities is computed thus:

Sale of land and building                     $194800

Purchase of land                                    ($44700)

Purchase of equipment                          ($58200)

Net cash provided by investing activities $91900

The purchase of treasury refers to purchase of own shares from shareholders,hence it is a financing activity

Payment of dividends to shareholders is also a financing activity

Issuance of common stock and retirement of bonds are also financing activity-related,as a result they do not feature in the above computation of cash provided or used by investing activities

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3 years ago
Which of the following is not a key component of the merger model we walked through in the course?
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Answer:

Gathering publicly available comparable company information

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2 years ago
Company expects to sell 1 comma 500 units of finished product in January and 1 comma 750 units in February. The company has 180
alina1380 [7]

Answer:

2720 units; 1806 units

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Ending Inventory in February = 80% x 1820 = 1456 units

Ending Inventory in January = 80% x 1750 = 1400 units

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Budgeted production in February = Budgeted sales in Feb + Ending inventory in Feb - Begining Inventory in Feb = 1750 + 1456 - 1400 = 1806 units

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Sort each description into the category where it fits best. Inflation and Deflation
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Wilmington Company reported pretax income of $25,000 during 2018 and $30,000 during 2019. Later it was discovered that the endin
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Answer:

$28,000

Explanation:

When closing inventory is understated during an year, it would lead to understated profits during the year i.e understated net income for the year 2018.

So, correct pre tax income for 2018 would be,

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Hence, correct pre tax income for 2019 would be,

= $30,000 - $2000 = $28000

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