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3 years ago

The first step in creating a cash flow statement is which of the following?

Business

1 answer:

yKpoI14uk [10]3 years ago

3 0

Answer:

C. Recording Income.

Explanation:

The first step to prepare a cash flow statement is to show the Net Income of that company. It is an operating cash flow activities, one of three activities of cash flow statement.

Answer Choice A can not be the answer as the company cannot record any goals in cash flow because cash flow is a statement of cash inflow and outflow.

Answer choice B cannot be the answer as expenses are not shown in the cash flow statement either (If indirect method). However, after adjusting prepaid and advance or paid to suppliers are shown below the noncash account.

Answer choice D is not an option as tax information can be shown only if they are accrued or prepaid.

Therefore, C is the correct answer.

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horsena [70]

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3 years ago

Read 2 more answers

The income statement for the Tamarisk, Inc. for the month ended July 31 shows Service Revenue $18,470, Salaries and Wages Expens

dmitriy555 [2]

Answer:

Explanation:

The closing entry for the following accounts are shown below:

1. Service Revenue A/c Dr $18,470

To Income Summary $18,470

(Being revenue account closed)

2. Income summary A/c Dr $14,810

To Maintenance and Repairs Expense $4,220

To Salaries and Wages Expense $9,380

To Income Tax Expense $1,210

(Being expenses accounts are closed)

3. Income summary A/c Dr $3,660

To Retained earning $3,660

(Being the difference is credited to retained earning)

4. Retained earnings A/c Dr $1,980

To Dividend A/c $1,980

(Being dividend account is closed)

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4 years ago

ABC and XYZ are identical firms in all respects except for their capital structures. ABC is all-equity financed with $530,000 in

Lesechka [4]

Answer:

The cost of equity for ABC is 11.74 percent and for XYZ it is 14.47 percent.

Explanation:

a. For ABC

ABC cost of equity = Earning before interest and tax (EBIT) / Equity = $62,222 / $530,000 = 0.1174, or 11.74%

b. For XYZ

Perpetual debt = $530,000 - $310,000 = $220,000

Interest on debt = $220,000 * 7.9% = $17,380

Earning after interest = $62,222 - $17,380 = $44,842

XYZ cost of equity = $44,842 / $310,000 = 0.1447, or 14.47%

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3 years ago

On January 1, 2021, Kat Corp. granted an employee an option to purchase 60,000 shares of Kat's $5 par common stock at $20 per sh

Andreyy89

Answer:

b. $ 240,000

Explanation:

Calculation for what Kat should recognize as compensation expenses

Using this formula

Compensation expenses= (Purchase shares ×Value of options)/ Years of Service

Let plug in the formula

Compensation expenses=(60,000 shares

x $8 per option) / 2 years of service

Compensation expenses=480,00/2 years of service

Compensation expenses= = 240,000

Therefore what Kat should recognize as compensation expenses is 240,000

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3 years ago

Critical analysis Q8 Complete the following statement. An unexpected increase in the price level will temporarily output and emp

tester [92]

Answer: INCREASE; DECREASE

Explanation:An unexpected increase in the price of goods and services will cause a temporary output and employment,this is so because producers will respond to the rise in price by increasing the amount of goods and services supplied to the market,this will lead to a rise in employment.

An unexpected decrease in price level will lead to a decrease in the output by producers and employment will drop accordingly. This tries to show how price determines change in supply and employment.

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3 years ago