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MissTica
3 years ago
8

Determine proper classification (LO11-1) Analysis of an income statement, balance sheet, and additional information from the acc

ounting records of Gadgets, Inc., reveals the following items. Required: Select the section of the statement of cash flows in which each of these items would be reported: operating activities (indirect method), investing activities, financing activities, or a separate noncash activities note.
1. Purchase of a patent.
2. Depreciation expense
3. Issuance of a note payable
4. Increase in inventory
Business
2 answers:
alexandr402 [8]3 years ago
7 0

Answer:

Patent-investing activity

depreciation expense-operating activity

issuance of note payable-financing activity

Increase in inventory-operating activity

Explanation:

The purchase of patent as intangible asset is reported as an investing activity item as an outflow of cash from the business.

Depreciation expense is meant to added to net income  in arriving at the net cash flows from operating activities

Issuance of a note payable is a financing item under the financing activities' segment of the cash flow as an inflow.

Increase in inventory is increase in net working capital which is deducted as an operating activity item .

mart [117]3 years ago
7 0

Answer:

1. Purchase of a patent - Investing activities

2. Depreciation expense - Operating activities

3. Issuance of a note payable - Financing activity

4. Increase in inventory - Operating activity

Explanation:

Operating activity of cash flows include cash inflows and cash outflows from day to day business activities. This includes cash flows use from ongoing business activities.

Investing activity of cash flows includes cash inflows and cash outflows from investments of the business. This includes purchase of assets, sale of assets, investment in securities.

Financing activity of cash flows include cash inflows and cash outflows to fund the company. The activities that are incurred to fiance the business are classified as financing activity.

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Investment can be increased both by reducing taxes on private saving and by reducing the government budget deficit.
Romashka [77]

Answer:

1. Increasing

2. A. The elasticity of private saving with respect to the after-tax real interest rate

B. The response of private saving to changes in the government budget deficit

C. The elasticity of investment with respect to the interest rate

Explanation:

1. It is difficult to implement both of these policies at the same time because reducing taxes on private spending has the effect of <u><em>Increasing</em></u> the government budget deficit.

A Government budget deficit is acquired when the government spends more than it earns. The Government earns money from taxes and if it spends more than it receives in taxes, that will lead to a deficit. If taxes on Private spending are reduced, this will lead to less tax revenue for the government thereby increasing the Deficit.

2. All of the listed options are useful in determining which policy would be a more effective way to raise investment.

The elasticity of private saving with respect to the after-tax real interest rate refers to how much private saving changes in reaction to a change in the tax rates. This can enable one decide how much investment will be expected if the Government reduces or increases taxes.

The response of private saving to changes in the government budget deficit is also a useful factor to look at because private savings reduce when government deficits reduce.

Also how much does investment change by due to interest rates. This will be important to note in terms of Private Investment to see if it will be beneficial to use it over reducing the government budget deficit given a certain interest rate.

7 0
3 years ago
Alpha Sounds Corp., an electric guitar retailer, was organized by Michele Kirby, Paul Glenn, and Gretchen Northway. The charter
snow_lady [41]
I just needed some points to figure things out i don’t do anything else
7 0
3 years ago
Lueckenhoff Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labo
anastassius [24]

Answer:

C. $9.50 per direct labor-hour

Explanation:

The computation of the predetermined overhead rate is shown below:

Predetermined overhead rate = (Total estimated manufacturing overhead) ÷ (estimated direct labor-hours)

where,

Total estimated manufacturing overhead equals to

= Total fixed manufacturing overhead cost + Direct labor hours × variable manufacturing overhead per direct labor-hour

= $497,000 + 70,000 × $2.40

= $497,000 + $168,000

= $665,000

And, the direct labor-hours is 70,000  

So the rate is equal to

= $665,000 ÷ 70,000

= $9.5 per direct labor-hour

4 0
3 years ago
Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is: Question 20
irina [24]

Answer:

c. half of the order quantity

Explanation:

Based on the constant demand assumption in the economic order quantity (EOQ) model, the average cycle inventory is <u>half of the order quantity</u>

Economic order quantity is a quantity which minimizes the ordering cost and holding cost  

Q = EOQ = \sqrt{2*D*S/ H} where  D = Demand unit, S = Order cost and H = Holding cost

- Ordering cost and the Holding at EOQ will be same

- Average inventory = Q/2

- Average inventory is the half of the order quantity.

7 0
3 years ago
The past five monthly returns for Kohl’s are 3.54 percent, 3.62 percent, −1.68 percent, 9.25 percent, and −2.56 percent. Compute
luda_lava [24]

Answer

The answer and procedures of the exercise are attached in the following archives.

Explanation  

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.  

6 0
3 years ago
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