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max2010maxim [7]

4 years ago

9

Consider the following transactions:________. a. Purchased equipment for $130,000 cash. b. issued S14 par preferred stock for ca

sh. c. Cash received from sales to customers of 535,000. d. Cash paid to vendors, 517,000. e. Sold building for $19,000 gain for cash. f. Purchased common treasury shares for 528,000. g. Paid a notes payable with 1,250 of the company's common shares. Requirement Identify the category of the statement of cash flows in which each transaction would be reported.

1 answer:

Tems11 [23]4 years ago

4 0

Answer:

a. Investing Activities

b. Financing Activities

c. Operating Activities

d. Operating Activities

e. Investing Activities

f. Financing Activities

g. Non - Cash Financing Activities

Explanation:

The Cash Flow Statement is Prepared under the Following Categories :

1. Operating Activities

Reports the cash flows from the ordinary course of business. Example is cash collection from customers.

2. Investing Activities

Reports the cash flow from sale or acquisition of assets. Example is the sale of the Building.

3. Financing Activities

Reports the cash raised by issuing financial instruments and the repayment there-off. Example is the issue of Preference Shares for Cash.

Non - Cash Items

These are not reported in the Cash flow statement because they do not include movement of cash.

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Phillips Enterprises Inc. is expected to pay a dividend of $2.60 next year. Dividends are expected to grow at a constant rate of

Sergeu [11.5K]

Answer:

Cost of internal equity =21%

Cost of external Equity =23.29%

Explanation:

Using the constant growth model:

$Po=\frac{D1}{ke-g}$

if ke is made subject of formula then the cost of internal equity ke is calculated as follows:

$ke=\frac{D1}{Po}+g$ = $\frac{2.60}{20}+0.08$ = 21%

If external equity is to be used, that means that the company will have to issue share to get a fresh infection of capital into the company, and is thus likely to face flotation costs. the company will receive a net of $20 minus flotation costs for every share sold.

$Po(1-f)=\frac{D1}{ke-g}$

If ke is made subject of formula then the cost of external equity ke is calculated as follows:

$ke=\frac{D1}{Po(1-f)}+g$ = $\frac{2.60}{20(1-0.15)}+0.08$ = 23.29%

3 0

4 years ago

Brief Exercise 4-5 Morgana Company identifies three activities in its manufacturing process: machine setups, machining, and insp

Anni [7]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

The company identifies three activities in its manufacturing process: machine setups, machining, and inspections.

Machine setups:

Estimated annual overhead= $140,000

Cost driver= machine setups

Activity= 2,000 machine setups

Machining:

Estimated annual overhead= $240,000

Cost driver= machine hours

Activity= 24,000 machine hours

Insections:

Estimated annual overhead= $54,000

Cost driver= number of inspections

Activity= 1,200 inspections

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

Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Machine setup:

Estimated manufacturing overhead rate= 140,000/2,000= $70 per machine setup

Machining:

Estimated manufacturing overhead rate= 240,000/24,000= $10 per machine hour

Inspection:

Estimated manufacturing overhead rate= 54,000/1,200= $45 per inspection

3 0

4 years ago

The accounting staff of Wyoming Outfitters, Inc.,has assembled the following information for the year ended December31, 2015:

lbvjy [14]

Answer:

<u>statement of cash flows under direct method.</u>

Cash flow from Operating Activities

Cash received from customers 835,000

Cash paid to suppliers and employees (606,000)

Cash Generated From Operations 229,000

Interest paid (19,000)

Income taxes paid (70,000)

Net Cash from Operating Activities 140,000

Cash flow from Investing Activities

Cash paid to acquire plant assets (23,000)

Loans made to borrowers (5,200)

Interest and dividends received 32,400

Proceeds from sales of plant assets 9,000

Net Cash from Investing Activities 13,200

Cash flows from Financing Activities

Proceeds from short-term borrowing 10,000

Collections on loans (excluding interest) 4,000

Dividends paid (53,000)

Net Cash used in Financing Activities (39,000)

Net Cash Flow Movement During the Year 114,200

Add Cash and cash equivalents, Jan. 1 35,800

Cash and cash equivalents, Dec. 31 150,000

Explanation:

Show Cash flow resulting from:

Operating Activities (Direct Method)
Investing Activities
Financing Activities

6 0

3 years ago

Social Media, Inc. (SMI) has two services for users. Toot!, which connects tutors with students who are looking for tutoring ser

stealth61 [152]

Answer:

Instructions are below.

Explanation:

Giving the following information:

Toot! TiX Total

Users 17,900 24,100 42,000

Administrative costs $ 1,848,000

<u>We need to allocate administrative costs to each product. First, we need to calculate the predetermined overhead rate:</u>

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

Predetermined manufacturing overhead rate= 1,848,000/42,000

Predetermined manufacturing overhead rate= $44 per user

<u>Now, we allocate overhead:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Toot!= 44*17,900= 787,600

TiX= 44*24,100= 1,060,400

<u>Finally, the gross profit for each service:</u>

Toot!:

Revenue= 2,200,000

Engineering cost= (1,096,250)

Administrative cost= (787,600)

Profit= $316,150

TiX:

Revenues= 2,400,000

Engineering cost= (1,213,750)

Administrative cost= (1,060,400)

Profit= $125,850

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4 years ago

You just won the Powerball and are offered two payment options: 1) Receiving $80 million per year for 25 years beginning at next

laila [671]

Answer: $80 million per year for 25 years

Explanation:

The option you should choose is one that will guarantee you the highest present value.

This means that you need to discount the annual payment of $80 million per year for 25 years to find the present value. As you did not include a rate, we shall assume a rate of 8% for reference purposes.

The annual payment is an annuity so the present value can be calculated by:

Present value of annuity = Annuity payment * Present value interest factor, rate, no. of years

= 80,000,000 * Present value interest factor, 8%, 25 years

= 80,000,000 * 10.6748

= $‭853,984,000‬

<em>The present value of the annual payment is more than the present value of the $850 million received today so the Annual payment should be taken. </em>

7 0

3 years ago