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aliina [53]
4 years ago
6

Kenear, Inc., has a new project in mind which will increase accounts receivable by $13,000, increase accounts payable by $9,000,

increase fixed assets by $11,000, and decrease inventory by $20,000. What is the amount the firm should use as the initial cash flow attributable to net working capital when they analyze this project?
Business
1 answer:
kow [346]4 years ago
7 0

Answer:

$16,000

Explanation:

The computation of the net working capital is shown below:

= - Increase in accounts receivable +  Increase in accounts payable + decrease in inventory

= - $13,000 + $9,000 + $20,000

= $16,000

The increase in the fixed assets would not be considered as it is not a part of working capital. The working capital only includes current liabilities and current assets.

The increase in accounts payable and a decrease in inventory increase the cash flows whereas the increase in accounts receivable decreases the cash flows. So according to this, we made the adjustment which is shown above.

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Masterlink Co., in applying the lower of cost or market method, reports its inventory at net realizable value. Which of the foll
nasty-shy [4]

Answer:A. Cost is greater than net realisable value(NRV)

Explanation:

An inventory should not be higher than the price its sale or use and this requires the comparison of inventory cost to it's ( NRV) and whichever is lower will be used as cost of inventory

NRV= Sales price less cost to completion and less estimated cost necessary to make the sales.

4 0
3 years ago
Money deposited into a 401k is not taxed, however it is taxed years later when it is withdrawn for retirement. so if the money i
ExtremeBDS [4]
I believe the answer is: it gives a special tax break to employees who are saving primarily for retirement. 

This make the taxpayers able to maxmize their purchasing power prior to their retirement. Which allow them to do things such as putting more money down on their mortrage, improve their standard of living, increasing their life saving, or putting of some of their income in various type of investments.
4 0
4 years ago
Read 2 more answers
On june 1 of year 1 doe company paid $1,800 cash for an insurance policy that would protect the company for one year. the compan
Lena [83]

Calculation of amount of prepaid insurance and insurance expense shown on the year 2 financial statements;


It is given that on June 1 of year 1 the company paid $1,800 cash for an insurance policy for one year.

Hence the insurance expense for the first year shall be calculated for 7 months (June to December) = 1800*7/12 = $1050. The balance in the prepaid instance as on December 31 of the first year shall be (1800-1050) = $750


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5 0
3 years ago
When the Shaffers had a monthly income of $4,000, they usually ate out 8 times a month. Now that the couple makes $4,500 a month
choli [55]

Explanation:

Income Elasticity of Demand(IED)= Percentage change in quantity demanded/ Percentage change in income

-Percentage change in Q:

%Change in quantity demanded= (q2-q1/q1) = (10-8)/8= 0.25

-Percentage change in Income:

%Change in income= (i2-i1/i1) = (4,500-4,000)/4,000= 0.125

IED= 0.25/0.125= 2

This indicates that the Shaffers are very sensitive to changes in income when it comes to eating out. Which means that changes in income will change significantly the number of times they eat out.

2. Restaurant meals are normal goods, in this case, because when income rises, they ate more in restaurants, then the units consumed for this good increase too.

5 0
3 years ago
Read 2 more answers
5. Calculating tax incidence Suppose that the U.S. government decides to charge cola consumers a tax. Before the tax, 35 million
wolverine [178]

Answer:

$4

$1

$3

False

Explanation:

Tax on a case of beer = amount consumers pay after the tax has been levied - amount producers receive = $7 - $3 = $4

Burden of tax on consumers = amount consumers pay after the tax has been levied - amount consumers pay before tax was levied = $7 - $6 = $1

Burden of tax on producers =  Tax charged - Burden of tax on consumers = $4 - $1 = $3

6 0
4 years ago
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