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Neko [114]
3 years ago
10

Squirrel tree services reports the following amounts on december 31, 2021.Assets Liabilities and Stockholders’ EquityCash $9,500

Accounts payable $15,100Supplies 3,600 Salaries payable 5,300Prepaid insurance 5,300 Notes payable 38,000Building 90,000 Common stock 40,000 Retained earnings 10,000In addition, the company reported the following cash flows.Cash Inflows Cash OutflowsCustomers $96,000 Employee salaries $40,000Borrow from the bank (note) 38,000 Supplies 22,000Sale of investments 35,800 Dividends 15,500 Purchase building 98,000Required:
1. Prepare a balance sheet.
2. Prepare a statement of cash flows.
Business
1 answer:
fiasKO [112]3 years ago
7 0

Answer and Explanation:

1. The preparation of the balance sheet is presented below:

                               <u> Squirrel tree services</u>

<u>                                           Balance sheet</u>

<u>                          For the year ended December, 31, 2021</u>

<u>Liabilities                               Amount             Assets                    Amount </u>

<u>and stockholder equity</u>

Liabilities

Account payable                  $15,100        Cash                            $9,500

Salaries payable                   $5,300         Supplies                     $3,600

Note payable                        $38,000       Prepaid insurance    $5,300

Total liabilities                       $58,400      Building                       $90,000

Equity

Common stock                     $40,000

Retained earnings                 $10,000

Total equity                            $50,000

Total liabilities & equity          $108,400   Total assets              $108,400

2. The preparation of the cash flow statement is presented below:

                               <u> Squirrel tree services</u>

<u>                                    Cash flow statement</u>

<u>                          For the year ended December, 31, 2021</u>

Particulars                    Amount ($)             Amount ($)

Cash flow from operating activities-  

Cash inflows  customers  96,000  

Cash outflows salaries      (40,000)  

Cash outflows supplies     (22,000)  

Net Cash flow from operating activities (A)     34,000

Cash flow from investing activities-  

Sale of investments                   35,800  

Purchase of building                 (98,000)  

Net Cash flow from investing activities (B)     (62,200)

Cash flow from financing activities  

Borrowed from bank                      38,000  

Dividends                                      (15,500)  

Net Cash flow from financing activities (C)             22,500

Net increase in cash (A+B+C)                   (5,700)

Add: Cash at beginning of year                 15,200

Cash at end of year                                     9,500

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Butler Corporation is considerIng the purchase of new equipment costing $81,000. The projected annual after-tax net income from
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d. $(6,642)

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Present value can be calculated using a financial calculator

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Present value = $(6,642)

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

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There are three primary objective of advertising:

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Answer:

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The company benefits from usage of stream to the tune of $4,000 a year.  In such scenario, if company compensates the fishermen for any amount between $8,000 and $40,000 then, in that case, optimal solution to the problem can be achieved in absence of any other transaction cost as per the Coase Theorem.

Therefore, The Asarta Inc. could pay the fishermen $8,500 and keep polluting.

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