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4 years ago

A comparative balance sheet and an income statement for Burgess Company are given below:

Business

2 answers:

Anarel [89]4 years ago

3 0

Answer:

Burgess Company statement of cashflows shows a Net decrease in Cash & Cash Equivalents of $30 Million and Closing Cash & Cash Equivalents of $49 Million. Complete solution using indirect method is presented below and also attached in Excel format.

*Please note that all figures are 'dollars in millions' and figures in brackets represent negative figures

Explanation:

Burgess Company

Statement of Cash flows

Net Profit before tax $178

Adjustment of Non Cash Expenses:

Depreciation (Working 1) $132

Gain on Sale of Equipment $(3)

Increase in Accrued Liabilities $25

Working Capital Changes:

Increase in Inventory $(45)

Increase in Accounts Receivables $(65)

Increase in Accounts Payables $95

Cash generated from Operations $317

Tax Paid (Working 2) $(57)

Net cash from operating activities $260

Cash flows from Investing Activities

Purchase of Property, Plant & Equipment Working 3) $(62)

Proceeds from Sale of Equipment $8

Net cash from investing activities $(54)

Cash flow from Financing Activities

Repayment of Bonds Payable $(170)

Dividends paid (Working 4) $(66)

Net cash from Financing Activities $(236)

Net decrease in cash and cash equivalents $(30)

Opening cash and cash equivalents $79

Closing cash and cash equivalents $49

Workings

Working 1

Opening Accumulated Depreciation $641

Add: Depreciation Charge for the year (Balancing Figure) $132

Less: Depreciation of Equipment Sold $(8)

Closing Accumulated Depreciation $765

Working 2

Opening Tax Payables $70

Add: Tax Payable charged to Income Statement $63

Less: Cash Payment (Balancing Figure) $(57)

Closing Tax Payable $76

Working 3

Opening Property, Plant & Equipment $1,466

Add: Purchases during the year (Balancing Figure) $62

Less: Sold during the year $(13)

Closing Property, Plant & Equipment $1,515

Working 4

Opening Retained Earnings $928

Add: Net Income for the Year $115

Less: Dividends Paid During the year (Balancing Figure) $(66)

Closing Retained Earnings $977

Download xlsx

Ghella [55]4 years ago

3 0

Answer: The net increase in cash $ Cash equivalents is $13million

Explanation:

Cash flow statement for the year ended.

Operating Activities

Net income. 115,000

Depreciation 765,000

Account Receivable 645,000

-----------------

Total cash generated. 1,525,000

Cash from investing Activities

Property, plant &Equipment (1,515,000)

Proceed on sale of equipment 3

Net cash used in investing Activities. (1,512,000)

-----------------

Net increase in cash & cash equivalent. 13,000,000

Cash & cash equivalent at beginning of period. 49,000,000

Cash & cash equivalent at end of period. 79,000,000

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2 years ago

Mary, Ann, and Beth are partners. Their capital balances are, ; ; and , respectively. As per the partnership agreement, Mar

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Complete Question:

Mary, Ann, and Beth are partners. Their capital balances are $23,000, $41,000 and $30,000 respectively As per the partnership agreement Mary receives a profit share of 2/9, Ann has 4/9, and Beth has 39 Beth withdraws from the partnership by receiving $23.000 What will be the impact of this transaction on the journal entries?

A. Cash will be debited for $30,000

B. Mary. Capital will be debited for S 7,000

C. Ann, capital will be credited for $7,000

D. Beth, Capital will be debited for $30,000

Answer:

D. Beth, Capital will be debited for $30,000

Explanation:

The entry would be reduction in capital by $30,000 because his investment is sold for $23,000 and the remainder $7,000 would be profit for two remaining partners and would be shared with their respective ownership.

The entry is as under:

Dr Beth Capital Account $30,000

Cr Mary Capital A/c $2,333 (1/3) of $7,000

Cr Ann Capital A/c $4,667 (1/3) of $7,000

Cr Cash Account $23,000

Hence the option D is correct here.

Option A is incorrect because cash wasn't debited with.

Option B is incorrect because Mary capital wasn't debited, it was credited.

Option C is also incorrect because Ann's capital was credited but with (2/3) share.

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3 years ago

Firm A is concerned about the reactions of buyers to the price it sets for its product. Firm B is concerned about the reactions

solmaris [256]

Answer:

Explanation:

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Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

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An example of monopolistic competition are restaurants

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Oligopolies are characterised by:

price setting firms

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profit maximisation

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3 years ago

ABC Corporation offered a four-for-one stock split. The number of outstanding shares before the split was 15,000, and the par va

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Answer: D. 60,000 shares at $5 per share

Explanation:

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The total value of shares = $15,000 x 20 = $300,000

Since the stock split is 4-for-1, the number of shares would be = 15000 x 4

= 60,000 shares

Therefore the total value of shares divided by the number of shares will give us the par value of the shares:

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3 years ago

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Answer:

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3 years ago