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Lisa [10]
3 years ago
15

You have just been hired as a financial analyst for Barrington Industries. Unfortunately, company headquarters (where all of the

firm's records are kept) has been destroyed by fire. So, your first job will be to recreate the firm's cash flow statement for the year just ended. The firm had $100,000 in the bank at the end of the prior year, and its working capital accounts except cash remained constant during the year. It earned $5 million in net income during the year but paid $750,000 in dividends to common shareholders. Throughout the year, the firm purchased $5.4 million of machinery that was needed for a new project. You have just spoken to the firm's accountants and learned that annual depreciation expense for the year is $450,000; however, the purchase price for the machinery represents additions to property, plant, and equipment before depreciation. Finally, you have determined that the only financing done by the firm was to issue long-term debt of $1 million at a 5% interest rate. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below.
What was the firm's end-of-year cash balance? Recreate the firm's cash flow statement to arrive at your answer. Write out your answer completely. For example, 5 million should be entered as 5,000,000. Round your answer to the nearest dollar, if necessary.
Business
1 answer:
Alekssandra [29.7K]3 years ago
8 0

Answer:

$400,000

Explanation:

Given the following :

Beginning Cash balance = $100,000

Net income during the year = $5,000,000

Dividend to common shareholders = $750,000

Purchase of machinery = $5,400,000

Depreciation expense = $450,000

Long term debt = $1,000,000

Rate = 5%

STATEMENT OF CASH FLOW:

Cashflow from operating activities :

Net income ___________5,000,000

Add: Depreciation exp. ___450,000

Net cash: ____________________5,450,000

Cashflow from. Investing Activities :

Purchase of machinery __(5,400,000)

Net cash: ____________________(5,400,000)

Cashflow from financing activities:

Payment of Dividend __(750,000)

Long term debt ______1,000,000

Net cash from financing __________250,000

Net increase in cash: ____________300,000

Beginning cash balance __________100,000

Year end Cash balance __________ 400,000

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Maksim231197 [3]

The best answer for this question would be:

 

$150,000

 

Because in the method of the “non-working” spouse method, they are given a calculation of (18 - youngest child's age) × $10,000 (18 being the legal age)

 

Resulting that the solution would be:

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8 0
3 years ago
Vance has a vested account balance in his employer-sponsored qualified profit-sharing plan of $40,000. He has two years of servi
Maurinko [17]

Answer: $5,000

Explanation:

Per the requirements of qualified plans that permit loans, the maximum amount that an individual can withdraw is whichever is lesser between $50,000 and 50% of their Vested Account Balance.

Vance in this scenario has a vested account balance of $40,000.

50% of that would be $20,000.

That means that he can be loaned $20,000. However, he already has an outstanding loan balance that must be accounted for of 15,000.

Subtracting those figures we have,

= 20,000 - 15,000

= $5,000

The maximum loan that Vance can take from the qualified plan is $5,000

7 0
3 years ago
Justin, a real estate salesperson with City Brokerage, received a referral fee after referring a client to Mark, another real es
Ganezh [65]

Answer: Justin's sponsoring broker

Explanation:

From the question, we are informed that Justin, a real estate salesperson with City Brokerage, received a referral fee when he refered a client to Mark, who is another real estate salesperson with City Brokerage.

The person to pay Justin his referral fee will be Justin's sponsoring broker. It should be noted that when another agents gets a referral from an agent, the sponsoring broker is the one who gives the referral fee to the referring agent.

8 0
3 years ago
ecord adjusting journal entries for each of the following for year ended December 31. Assume no other adjusting entries are made
k0ka [10]

Answer: Please Refer to Explanation

Explanation:

Please see complete question attached to this answer.

A.

As the company has not paid the salary but they recognize it is an expense, it should be credited to Salaries payable from the salary expense account.

DR Salary Expense $ 18,500

CR Salary Payable $18,500

( To record Salary Expense incurred but not paid)

B.

As the company has not paid the interest but they recognize it is an expense, it should be credited to Interest Payable from the interest expense account until it is paid.

DR Interest Expense $400

CR Interest Payable $400

( To record interest expense on loan not paid )

C.

As the company has not paid the mortgage interest but they recognize it is an expense, it should be credited to mortgage payable from the mortgage account expense account

DR Mortgage Interest Expense $1,025

CR Mortgage Interest Payable $1,025

( To recording interest expense on mortgage not paid for the year).

3 0
3 years ago
Decision making in the international environment is __________ it is in a purely domestic environment. Group of answer choices l
Schach [20]

Decision making in the international environment is more complex than it is in a purely domestic environment.

<u>Explanation:</u>

A decision making is considered as a process that not only involves of making different choices out of the various alternatives available but also involves the step of identifying such alternatives and assessing them in a proper way. While making various decision is foreign environment, it is considered as a complex process.

Thus, out of the given options, the correct option is – more complex than.

3 0
3 years ago
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