Answer:
The correct answer is
b) Consent agreement signed by employees.
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- Katherine had to rush to the bank every few months to borrow more money. She didn't really talk to her banker about her financial situation because she had no trouble getting larger loans. You see, she was always on time with her payments. Katherine always took trade discounts to save money on her purchases. That is, she paid all of her bills within 10 days in order to save the 2% discount offered by her suppliers for paying so quickly.
- Katherine's products were mostly purchased on credit. They'd buy a few lamps and a pot, and Katherine would let them pay overtime. Some were extremely slow to pay her, taking six months or more.
- Katherine noticed a small drop in her business after three years. The local economy was struggling, and many people were losing their jobs. Nonetheless, Katherine's business remained steady. Katherine received a phone call from the bank one day, informing her that she was behind on her payments. She explained that she had been so preoccupied that she had missed the bills. The issue was that Katherine did not have enough money to pay the bank. She frantically called several customers for payment, but none of them could pay her. Katherine had a classic cash flow problem.
<h3>How is it possible to have high sales and high profits and run out of cash while running a business?</h3>
It is entirely possible if you have a high level of accounts receivables and inventory and a low level of accounts payables. A sale is recorded when an invoice is raised, and a shipment is delivered; this does not always imply that you received cash and that it is recorded in your accounts receivable. Similarly, if you keep a lot of inventory, a lot of your money is locked up until the inventory is sold. On the contrary, if your payment terms with your suppliers are less favorable, you will end up paying before your receivables convert to cash. As a result, high sales and profits do not always imply a strong cash position.
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Answer:
$11,175,000
Explanation:
The net sales of Siena Company for the last year shall be determined through following mentioned formula:
Net sales=Gross sales-sales returns and allowances-sales discounts
In the given question:
Gross sales=$11,720,000
Sales returns and allowances=$370,000
Sales discounts=$175,000
Net sales=$11,720,000-$370,000-$175,000=$11,175,000
Answer:
True
Explanation:
Section 351 (a) establishes that no gain or loss should be recognized when property is transferred to a corporation:
- in exchange of stock in that corporation (might receive common stock or share class stocks)
- as soon as the exchange is complete, the new stockholder must be in control of the corporation.
Not all common stocks have the same voting rights, that is why they are divided into share classes which assign separate voting rights or powers. Section 351 does not include preferred stocks.
Answer:
2 transactions reduced ABC's total assets
Explanation:
First transaction that reduced ABC's total assets was the purchase of of equipment worth $1,200 for cash.This transaction drains cash to the tune of $1,200 since it was settled by a cash outflow of $1,200
The second transaction that negatively the business's total assets was the payment of salaries to employees to the tune of $10,000, this also was a cash outflow of $10,000 from the business .
The issue of shares increased the total assets since it was cash inflow.
The purchase of land implies an increase in asset land and an increase in liabilities notes payable.
The receipt of $14,000 cash increases total assets.
The purchase of office supplies on account did not reduce assets but increases it.
