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Zolol [24]
3 years ago
14

The owner’s initial investment consists of $38,600 cash and $45,980 in land. The company’s $18,550 equipment purchase is paid in

cash. The accounts payable balance of $9,060 consists of the $3,830 office supplies purchase and $5,230 in employee salaries yet to be paid. The company’s rent, telephone, and miscellaneous expenses are paid in cash. No cash has been collected on the $14,620 consulting fees earned. Using the above information prepare an October 31 statement of cash flows for Ernst Consulting. (Cash outflows should be indicated by a minus sign.)
Business
1 answer:
castortr0y [4]3 years ago
6 0

Missing information:

ERNST CONSULTING

Income Statement

October 31. 202x

Revenues:

Consulting fees earned $15,600  

Total revenues $15,600

Expenses:

Salaries expense $7,450  

Rent expense $4,070

Telephone expense $810

Miscellaneous expenses $630

Total expenses $12,960

Net income $2,640

Cash dividends $2,530

Answer:

Ernst Consulting

Statement of Cash Flows

October 31, 202x

Cash flows from operating activities:

Cash received from customers                                     $0

Cash paid for:

Rent expense                                                         -$4,070

Telephone expense                                                  -$810

<u>Miscellaneous expenses                                         -$630 </u>

Total cash flow from operating activities             -$5,510

Cash flows from investing activities:

<u>Cash paid for equipment                                     -$18,550</u>

Total cash flows from investing activities           -$18,550

Cash flows from financing activities:

Cash investment from stockholders                   $38,600

<u>Cash paid for dividends                                        -$2,530</u>

Total cash flows from financing activities           $36,070

Net cash increase                                                  $12,010

<u>Cash balance October 1, 202x                                     $0</u>

Cash balance October 31, 202x                           $12,010

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Findell Corporation is considering two projects, A and B, and it has gathered the following estimates for the projects Project A
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Answer:

a. 1.096

Explanation:

The present value index is the same as the profitablility index(PI), which is computed by dividing the present value of future cash inflows by the initial investment(the present value of cash outflows). A profitability of above 1 means that the project is viable as the numerator(PV of cash inflows) exceeds the denominator( initial cash outlay).

Project A PI index= Present value of cash inflows/Present value of cash outflows

Project A PI index= $84,360/$77,000

Project A PI index= 1.096  

8 0
3 years ago
Shamrock Corp. has a deferred tax asset account with a balance of $76,000 at the end of 2019 due to a single cumulative temporar
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Answer:

a.                                              Debit             Credit

deferred income taxes         $5,400

Income tax expense             $155,600            

                        Income tax payable           $161,000

b. No valuation account related to the deferred tax asset is in existence at the end of 2019, therefore no record should be make

Explanation:

a. In order to record the income tax expense, deferred income taxes, and income taxes payable for 2017 we would have to make the following calculations as follows:

deferred income taxes=($407,000×20%)-$76,000

deferred income taxes=$5,400

Income tax payable=$805,000×20%

Income tax payable=$161,000

Income tax expense=$161,000-$5,400

Income tax expense=$155,600

Therefore, the record of  income tax expense, deferred income taxes, and income taxes payable for 2017, assuming that it is more likely than not that the deferred tax asset will be realized in full would be as follows:

                                               Debit             Credit

deferred income taxes         $5,400

Income tax expense             $155,600            

                        Income tax payable           $161,000

b. No valuation account related to the deferred tax asset is in existence at the end of 2019, therefore no record should be make

6 0
3 years ago
An existing electrical power line needs to have its capacity increased, and this can be done in either of two ways. The first me
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Answer:

3 years

Explanation:

<u>First method</u>

The PV of the investment can be written as:

PV1 = $15,000 + $32,500/(1+0.06)^n

<u>Second method</u>

The PV of the investment can be written as:

PV2 = $23,000 + $23,000/(1+0.06)^n

After n years both projects will be economically equal. Hence their present value must be equal PV1 = PV2

$15,000 + $32,500/(1.06)^n = $23,000 + $23,000/(1.06)^n

$23,000 - $15,000 = $32,500/(1.06)^n - $23,000/(1.06)^n

$8,000 = $9,500/(1.06)^n

(1.06)^n = $9,500/$8,000

(1.06)^n = 1.1875

Taking log on both sides we get:

nlog1.06 = log 1.1875

n = log 1.1875/log 1.06

n = 0.07463361829/0.02530586526

n = 2.94926166417121

n = 3

So, the answer is 3 years

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Answer:

b) decline

Explanation:

If people's trust in the banking system is reduced due to a surge in bank failures, the money expansion resulting from a new deposit will <u>decline</u>. This happens because people lost trust and hastily withdrawn their money deposited with the bank.

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