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Studentka2010 [4]
3 years ago
11

When using the indirect method to prepare the operating section of a statement of cash flows, which of the following is deducted

from net income to compute cash provided by used by operating activities?
a. Decrease in accounts receivable
b. Gain on sale of land.
c. Amortization of patent
d. All of the above are deducted from net income to arrive at cash flow from operating activities
Business
1 answer:
zysi [14]3 years ago
5 0

Answer:

B

Explanation:

When using the indirect method to prepare the operating section of a statement of cash flows , the gain on sale of land will be deducted from the net income as it has already been included in the net income as the gain on the sales of the land , which was a non cash recognition in the course of the business.

Decrease in receivable means that there was an inflow of cash as some receivables had paid their debts , thus it is added.

The amortization is a non cash expenses that had been deducted which will need to be added back to the net income for the purpose of cash flow.

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In performing accounting services for small businesses, you encounter the following situations pertaining to cash sales. 1. Ivan
Alona [7]

Answer:

Requirement: Prepare the entry to record the sales transactions and related taxes.

1.   Date      Account Titles and Explanation     Debit     Credit

   Apr. 10   Cash                                                 $30,975

                        Sales Revenue                                          $29,500

                        Sales Tax Payable                                     $1,475

                 (To record Cash sales along with sales tax)

2. Date      Account Titles and Explanation    Debit     Credit

   Apr. 15   Cash                                                 $18,530

                        Sales Revenue                                          $17,000

                        Sales Tax Payable                                     $1,530

                  (To record Cash sales along with sales tax)

<u></u>

<u>Workings</u>

- Total Sales along with sales tax = $18,530, Sales Tax Rate = 9%. Sales Tax Amount = 18530*(0.09/1.09) = $1,530

- Sales Without Sales Tax = $18,530 - $1,530 = $17,000

7 0
3 years ago
The production department of Priston Company has submitted the following forecast of units to be produced by quarter for the upc
Levart [38]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

1st Quarter -  2nd Quarter - 3rd Quarter - 4th Quarter

Units to be produced: 6,000 - 7,000 - 8,000 - 5,000

the beginning raw materials inventory= 3,600

Each unit requires three pounds of raw material that costs $2.50 per pound. Management desires to end each quarter with a raw materials inventory equal to 20% of the following quarter

I will assume that the requirements are the cost of direct material for each quarter.

<u />

<u>The direct material budget is calculated by the following formula:</u>

Direct material budget= direct material for production + ending inventory - beginning inventory

Q1:

Production= (6,000*3)*$2.5= $45,000

Ending inventory= [(7,000*3)*$2.5]*0.20= $10,500

Beginning inventory= (3,600*2.5)= (9,000)

Total= $46,500

Q2:

Production= (7,000*3)*$2.5= $52,500

Ending inventory= [(8,000*3)*$2.5]*0.20= $12,000

Beginning inventory= (10,500)

Total= $54,000

Q3:

Production= (8,000*3)*$2.5= $60,000

Ending inventory= [(5,000*3)*$2.5]*0.20= $7,500

Beginning inventory= (12,000)

Total= $55,500

8 0
3 years ago
The current price of a stock is $50, the annual risk-free rate is 6%, and a 1-year call option with a strike price of $55 sells
wariber [46]

Answer:

$9.00.

Explanation:

The computation of the value of a put option is shown below:

Data provided in the question

Current price of the stock = $50

Risk free rate = 6%

Strike price = $55

Sale price = $7.20

Based on the above information

The value of put option is

Put = V - P + X exp(-r t)

= $7.20 - $50 + $55 e RF  - 0.06(1)

= $7.20 - $50 + $51.80

= $9.00

Hence, the value of put option is $9

6 0
3 years ago
Every society faces​ trade-offs because we live in a world of scarcity. Suppose a​ student-athlete has the opportunity to earn ​
Leokris [45]

Answer: Opportunity cost of returning to college next year is $1,000,000.

Explanation: Opportunity cost is the cost of the next best alternative sacrificed or foregone. When the athlete chooses to join college he is sacrificing his income that could be earned from playing the game. The player has the option of playing for the minor league baseball team for $1,000,000 or for European professional football team for ​$500,000. The person thus has a choice between playing for the minor league baseball team (since it is the highest paying) or going to college. Thus the opportunity cost of going to college will be $1,000,000.

8 0
3 years ago
Read 2 more answers
Suppose your expenses for this term are as follows: tuition: $10,000, room and board: $6,000, books and other educational suppli
Triss [41]
Opportunity cost is the loss due to forgoing one opportunity to select another one alternative.

In this case, the forgone alternative is the full-time employment and other expenses for the term when the alternative chosen is to be in school. In this case, room and board expenses remain the same whether in school or working full time and thus not considered. The part-time amount earned while at school is subtracted as it would be compensated be during full time employment.

Therefore;
Opportunity cost = $20,000+$10,000+$1,000-$8,000 = $23,000
6 0
3 years ago
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