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raketka [301]
3 years ago
8

Transactions that affect earnings do not necessarily affect cash. Identify the effect, if any, that each of the following transa

ctions would have upon cash and net income.
a. Purchased $125 of supplies for cash.
b. Recorded an adjusting entry to record use of $45 of the above supplies.
c. Made sales of $1,220, all on account.
d. Received $850 from customers in payment of their accounts.
e. Purchased equipment for cash, $2,500.
f. Recorded depreciation of building for period used, $610.
Business
1 answer:
sweet-ann [11.9K]3 years ago
6 0

Answer:

Explanation:

Net income is the summation of all revenue generated substracted from all costs such as tax, interest and others it is the profit made.

Cash flow is the amount that the producer needed to spend when stating an accounting section romove from amount needed at the end of that accounting section.

Whenever transactions are carried out,

Cash flow and net income can be affected in ways that are not the same, once goods is sold the net income is noted by the manufacturer, let say he sell goods of $400 to a retailer if the retailer doesn't pay instantly, it mean the manufacturer has $400 cash less.i.e net income

a. Purchased $125 of supplies for cash.

Answer:

✓There is decrease in cash by $125

✓There is no change as far as Net Income is concerned here.

b. Recorded an adjusting entry to record use of $45 of the above supplies.

Answer:

✓There is No change to Cash here,

✓The net income is is decreased by $45.

c. Made sales of $1,220, all on account.

Answer:

✓There is No change to Cash here,

✓The Net Income is increased by $1,220

d. Received $850 from customers in payment of their accounts.

Answer:

✓ There is Cash increase, by. $850 ,

✓ There is No change to Net Income

e. Purchased equipment for cash, $2,500.

Answer:

✓There is Cash is decreased by $2,500

✓ There is no change to Net Income

f. Recorded depreciation of building for period used, $610.

Answer:

✓ There is No change to cash,

✓ there is decrease in Net income by

$610

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Arturiano [62]

Answer:

a)

To my view, the MD viewpoint is better. In companies the existing process is usually analyzed and the pain points identified whenever there is a need for change. The new system is simply a change to the existing system. The stakeholders' specific needs are not completely addressed. The MD calls for a collection of and analysis of demands from scratch to share its needs , requirements and inhibitions between the principal stakeholders. The CIO and their staff would be able to assess in the requirements review process what worked and what did not work well for the organization.

In assessing the current process, the CIO and his team will align their thinking process with the pain points and correct the existing system. They are not going to build the system in a fresh light. A new system that meets the needs of stakeholders can be developed. For everybody, this is a win-win situation. The point of view of MD is therefore more logical and related.

b)

In the particular case, the most logical and comprehensive system analysis method is:

Primary stakeholder requirements collection: Primary stakeholders using the system must be consulted on their specific requirements and needs. It is also necessary to consider the limitations identified by stakeholders.

Comprehension of existing system and pain points: the current system can be analysed based on requirements collection and pain points can be emphasized in the current system.

A new system that will win for everyone: the new system must primarily comply with the needs of the stakeholders.

Presentation and approval of the system blueprint to stakeholders

Development and implementation of the system: system development can be carried out by the agile method of sprinting.

Monitoring and control of the system: to check for performance deviations, the system implemented should be observed. In order to monitor deviations, specific intervention can be implemented.

7 0
3 years ago
When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will
kipiarov [429]

When seeking financial backing from a venture capitalist, a small business owner should realize that the venture capitalist will expect an ownership stake in the company in exchange for financial backing.

Venture capitalists are investors that provide capital to small businesses, young companies, and start-ups in exchange for an equal value share in the asset and expect ownership.

Small businesses do not have adequate capital and turn to venture capitalists for financial backing to expand and upscale their projects. Venture capitalists do not invest in budding businesses but choose businesses that have strong management and clear concepts and are ready to market their products. Due to uncertainty in the investment outcome, venture capitalists tend to have a high failure rate, but the investments that do pan out tend to be high yield.

You can learn more about venture capitalist at

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5 0
1 year ago
Using the income statement for Times Mirror and Glass Co., compute the following ratios:
Umnica [9.8K]

Answer:

(A) Interest coverage charge ratio= 6.21

(B) Fixed charge coverage = 2.84

(C) Profit margin ratio= 8.57%

(D) Total assets turnover= 1.55

(E) Return on assets= 13.26%

Explanation:

(A) The Interest coverage charge ratio can be calculated as follows= EBIT/Interest expense

= 45,300/7,300

= 6.21

(B) The fixed charge coverage can be calculated as follows

= income before fixed charge + interest/fixed charges + interest

= 45,300+13,300/7,300+13,300

= 58,600/20,600

= 2.84

(C) The profit margin ratio can be calculated as follows

= Net income/sales × 100

= 22,800/266,000 × 100

=0.0857 × 100

= 8.57%

(D) The total assets turnover can be calculated as follows

= Sales/total assets

= 266,000/172,000

= 1.55

(E) The return on assets can be calculated as follows

= Net income/Total assets × 100

= 22,800/172,000 × 100

= 0.13255×100

= 13.26%

8 0
3 years ago
A firm's bonds have a maturity of 10 years with a $1,000 face value, a 9 percent semiannual coupon, are callable in 5 years at $
Sladkaya [172]

Answer:

Yield to maturity is 3.94%

Explanation:

Yield to maturity is the annual rate of return that an investor receives if a bond bond is held until the maturity.

Face value = F = $1,000

Coupon payment = $1,000 x 9% = $90/2  = $45 semiannually

Selling price = P = $1080

Number of payment = n = 10 years x 2 = 20

Yield to maturity = [ C + ( F - P ) / n ] / [ (F + P ) / 2 ]

Yield to maturity = [ $45 + ( 1000 - 1080 ) / 20 ] / [ (1,000 + 1080 ) / 2 ]

Yield to maturity = [ $45 - 4 ] / 1040 = $41 /1040 = 0.394 = 3.94%

4 0
3 years ago
A project that incurs costs in early years and yields benefits in later years has been estimated to have costs just equal to ben
enot [183]

Answer:

The discount rates were lowered

Explanation:

Discount rate is the rate that is used to determine the present value of future cash flows that will be spent in a project.

This is different from the cost of capital which is the amount that just meets the incurred cost of executing a project.

Discount rate determines of the benefits of the project are greater than the cost.

In the given scenario where benefits balance the cost, the project will be worthwhile is discount rate is lower.

That is there will be a lower cost of execution of the project so revenue will be higher than the cost

3 0
3 years ago
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