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yulyashka [42]
3 years ago
8

Mayweather reports net income of $327,500 for the year ended December 31. It also reports $105,400 depreciation expense and a $1

1,350 loss on the sale of equipment. Its comparative balance sheet reveals a $45,600 increase in accounts receivable, a $11,550 decrease in prepaid expenses, a $17,450 increase in accounts payable, a $14,300 decrease in wages payable, a $84,900 increase in equipment, and a $113,500 decrease in notes payable. Calculate the net increase in cash for the year.
Business
1 answer:
ankoles [38]3 years ago
6 0

Answer:

$214,950

Explanation:

The computation of the net increase in cash for the year is shown below:

a. Cash flow from Operating activities  

Net income reported $327,500

Add: Depreciation expense $105,400

Add: Loss on sale of equipment $11,350

Less: increase in accounts receivable -$45,600

Add: decrease in prepaid expenses $11,550

Add: increase in accounts payable $17,450

Less: decrease in wages payable -$14,300

Net Cash flow from Operating activities $413,350 (a)

b. Cash flow from Investing activities  

Purchase of equipment -$84,900

Net Cash flow from Investing activities -$84,900 (b)

c. Cash flow from Financing activities  

Payment of note payable -$113,500

Net Cash flow from Financing activities -$113,500 (c)

net increase in cash for the year is $214,950 (a + b + c)

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At the beginning of the year, ACME had an inventory of $600,000. During the year, the company purchased goods costing $2,250,000
babunello [35]

Answer:

COGS (cost of goods sold) = $2,100,000

Gross Profit rate = 0.3

Explanation:

The formula for computing COGS (cost of goods sold) is as

COGS (cost of goods sold) = Beginning inventory + Purchases - Ending inventory

where

Beginning inventory amounts to $600,000

Purchases made during the period is $2,250,000

Ending inventory is $750,000

So, putting the values above:

COGS (cost of goods sold) = $600,000 + $2,250,000 - $750,000

COGS (cost of goods sold) = $2,850,000 - $750,000

COGS (cost of goods sold) = $2,100,000

The formula for computing Gross Profit rate is as:

Gross Profit rate = Gross Profit / Net Sales

where

Gross Profit is computed as:

Gross Profit = Net Sales - COGS

= $3,000,000 - $2,100,000

Gross Profit = $900,000

Net Sales is $3,000,000

So, putting the values above:

Gross Profit rate = $900,000 / $3,000,000

Gross Profit rate = 0.3

4 0
2 years ago
A manufacturing department completed and transferred to finished goods a total of 50,000 units. They also had 2,500 units in end
Alinara [238K]

Answer:

The cost of units completed this period is $ 350,000

Explanation:

<u><em>Units Out of the Process Were:</em></u>

Finished Goods = 50,000

Ending Work In Progress = 2500

          <u>1.) Finished Goods Equivalent Units</u>

Materials : Finished Goods are 100% complete in terms of materials hence 50000 equivalent units

Conversion : Finished Goods are 100% complete in terms of conversion costs hence 50000 equivalent units

         <u> 2.) Cost of units completed Units</u>

Materials : 50000 × 5.75 =287500

Conversion : 50000×1.25 =62500

Total = 287500 + 62500 = $ 350,000

<em>*Note Ending Inventory is not relevant for this question</em>

<u />

3 0
3 years ago
Precision Tool is trying to decide whether to lease or buy some new equipment for its tool and die operations. The equipment cos
makvit [3.9K]

Answer:

$4,200

Explanation:

Cost of equipment = $52,000

Life of equipment = 3 years

Depreciation through straight line method = 52,000/3 = $17,333

Tax rate = 33%

Pretax cost of debt = 10%

Lease amount of equipment = $18,500

After tax cost of debt = 10%*(1-0.33)

After tax cost of debt = 10%*(0.67)

After tax cost of debt = 0.067

After tax cost of debt = 6.7%

After tax lease payment amount = 18,500*(1-0.33)

After tax lease payment amount = 18,500*0.67

After tax lease payment amount = 12,395

Present Value of 3 lease payment = 12,395/(1+0.067) + 12,395/(1+0.067)^2 + 12,395/(1+0.067)^3

Present Value of 3 lease payment = 12395/1.067 + 12395/1.1385 + 12395/1.2148

Present Value of 3 lease payment = 11616.68 + 10887.13 + 10203.33

Present Value of 3 lease payment = $32,707.14

Present Value of cost involved in purchasing the equipment is $52,000, however there will be a tax shield from depreciation therefore, this amount would reduce the company's cost.

Annual depreciation tax shield = 17,333*0.33 = $5719.89. There will be tax shield on depreciation for 3 years. Therefore, present value of $5719.89 is calculated for three years:

= $5719.89/(1+0.067) + $5719.89/(1+0.067)^2 + $5719.89/(1+0.067)^3

= $5719.89/1.067 + $5719.89/1.1385 + $5719.89/1.2148

= $5360.72 + $5024.06 + $4708.50

= $15,093.28

Present Value of the cost of buying the equipment = $52,000 - $15,093.28 = $36,906.72

Net Advantage Leasing = Present Value of the cost of buying the equipment - Present Value of 3 lease payment

Net Advantage Leasing = $36,906.72 - $32,707.14

Net Advantage Leasing = $4,199.58

Net Advantage Leasing = $4,200.

7 0
3 years ago
Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken. Also assume that in 1984 each bucke
madreJ [45]

Answer:

A) What is the GDP price index for 1984, using 2005 as the base year?

  • the GDP price index using 2005 as base year = [($15 / $20) x 100] = 75

B) By what percentage did the price level, as measured by this index, rise between 1984 and 2005? ...percent.

  • the price level increased by: [(100 - 75) / 75] x 100 = 33.33%

C) What were the amounts of real GDP in 1984 and 2005?

  • In 1984, real GDP = $20 x 7,000 buckets =  $140,000 or we can also use another method = ($15 x 7,000) / 0.75 = $105,000 / 0.75 = $140,000. The answer using both methods should be the same.
  • In 2005, real GDP = $20 x 22,000 buckets = $440,000

6 0
3 years ago
Charles Berkeley, Inc. just paid an annual dividend of $3.60 per share on its stock. The dividends are expected to grow at a con
8_murik_8 [283]

Answer:

D. $98.15

Explanation:

Price of stock formula;

Price today(P0) = \frac{D0(1+g)}{r-g}

D0= Current dividend

g = growth rate

r = required return

Price = \frac{3.60(1.045)}{0.11 -0.045}

= 3.762 /0.065

Price = 57.877

Price in 12 years (P12) = P0(1+g)

P12 = 57.877 *1.045^{12}

P12 =$98.152

Therefore, price of stock in 12 years will be $98.15

5 0
3 years ago
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