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zvonat [6]
3 years ago
10

The principal purpose of a statement of cash flows is to measure the profitability of a business that maintains its accounting r

ecords on the cash basis. True or False True False
Business
2 answers:
Alisiya [41]3 years ago
6 0

Answer: False

Explanation: The principal purpose of the statement of cash flows is to show where a firm's cash is being generated (inflow), and where its cash is being spent (outflow), over a specific period of time. These inflows and outflows are furthermore classed into operating, investing, and financing activities and are used by the investment community to determine the ability of a firm to generate cash, and then how the generated cash are spent. The statement of cash flows is essential in analyzing the liquidity and long-term solvency (ability to pay off debts) of a firm.

Alexus [3.1K]3 years ago
5 0

Answer:

False

Explanation:

The principal purpose of a statement of cash flows is to measure the profitability of a business that maintains its accounting records on the cash basis.

This is False because cash flows are also made for businesses that accounting records on the accrual basis rather than cash basis.

The cash flow is computed both by Direct and Indirect methods.

In indirect method of Cash flow Net income is computed using accrual income which recognizes revenues when earned and expenses when incurred.

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The collision repair industry does what volume of business per year? A. $1 million B. $10 Million C. $1 Billion D. $10 Billion
Eva8 [605]

Answer: D. $10 Billion

Explanation:

The United States has a large economy with a very large number of cars which was estimated to be around 280 million in the last quarter of 2019. With these many cars it would be improbable that there would not be quite a number of accidents and there are. In the year 2018, around 12 million cars were involved in motor accidents.

With such a staggeringly high number of cars involved in collisions, it is no wonder that it is estimated that the collision repair industry does around $10 billion worth of business every year.

6 0
3 years ago
Sandy transfers land worth $500,000, basis of $100,000, to a newly formed corporation, Dolphin Corporation, for all of Dolphin's
never [62]

Answer:

B. Sandy recognized gain of $400,000.

Explanation:

Sandy transfers land of basis $100,000 to Dolphin Corporation. The land worth is $500,000 which is transferred to Dolphin Corporation in return for all the stocks worth $300,000 and note was executed by Dolphin amounting $200,000. The total consideration of Dolphin Corporation amounts $500,000 which the worth of the land transferred by Sandy. The basis of Land was $100,000. Sandy can recognize a gain of $400,000.

7 0
3 years ago
Capalbo Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning o
aksik [14]

Answer:

Predetermined manufacturing overhead rate= $25.71 per direct labor hour

Explanation:

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

<u>Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base</u>

Predetermined manufacturing overhead rate= (1,192,360 / 52,000) + 2.78

Predetermined manufacturing overhead rate= 22.93 + 2.78

Predetermined manufacturing overhead rate= $25.71 per direct labor hour

8 0
3 years ago
Wolfe Company purchased a truck for $62,000, with an estimated useful life of 8 years and a salvage value of $10,000. The compan
k0ka [10]

Answer:

$42306

Explanation:

Depreciation expense using the double declining method = Depreciation factor x cost of the asset

Depreciation factor = 2 x (1/useful life) = 2/8

Depreciation expense in year 1 = 2/8 x 62,000 = 15500

Book value at the beginning of year 2 = 62,000 - 15500 = 46500

Depreciation expense in year 3 = 2/8 x 46500 = 11625

Book value at the beginning of year 3 =46500 - 11625 = 34,875

Depreciation expense in year 3 =34,875 x 2/8 = 8718.75

Book value at the beginning of year 4 = 34,875 - 8718.75 = 26156.25

Straight line depreciation expense = (book value of asset - Salvage value) / useful life

26156.25 - 10,000 / 5 = 16156.25 / 5 = 3231.25

Depreciation expense for the remaining 2 years =  3231.25 x 2 = 6462,50

total depreciation = sum of year 1 to 5 depreciation = 6462,50 + 15500 + 11625 + 8718.75 = $42306

6 0
3 years ago
You are the manager of a monopoly. A typical consumer's inverse demand function for your firm's product is P = 250- 4Q, and your
pentagon [3]

Answer: 1. $130 2. $225

Explanation:

For price discrimination to be implemented by a monopolist, it is vital that the direct elasticity of demand for the product at a price from different buyers to be significantly different:

in order for the customers to be easily identifiable;

so that further resale of the goods by buyers is not possible.

Check the attached file for the solutions to 1 and 2.

8 0
3 years ago
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