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Vitek1552 [10]
3 years ago
12

Ruston Company had Net Income for 2020 of $6,200,000. The firm invested $4,000,000 in manufacturing equipment during 2020. The e

quipment is being depreciated over five years using straight-line depreciation, starting in 2020. Assuming no other adjustments to cash flow than those mentioned here, create a statement of cash flows for 2020 with amounts in thousands. What is the Net Cash Flow in 2020
Business
1 answer:
Aloiza [94]3 years ago
4 0

Answer:

$3,000,000

Explanation:

Calculation to determine the Net Cash Flow in 2020

STATEMENT OF CASH FLOW

For the Year 2020

Cash flow from operating Activities:

Net Income $6,200,000

Add Depreciation Expense $ 800,000

Net Cash provided by operating activities $7,000,000

($6,200,000+$800,000)

Cash flow from Investing activities:

Investment in Equipment ($4,000,000)

Net Cash used in Investing activities ($4,000,000)

Net Cash flow in 2020 $3,000,000

Depreciation under Straight Line method = (Cost - Salvage Value)/Useful Life

Depreciation under Straight Line method= (4000000-0)/5

Depreciation under Straight Line method= 800,000

Therefore the Net Cash Flow in 2020 is $3,000,000

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Bluestone Company had three intangible assets at the end of the current year:
Dimas [21]

Answer:

Bluestone Company

1. Acquisition cost of each intangible asset:

Patent $3,200

Trademark = $0

Licensing Rights = $70,000

2. Amortization for the current year ended December 31:

Amortization Expenses:

Patent = $200 ($3,200/16)

Trademark = $7,500 (expensed in full)

Licensing Rights = $14,000 ($70,000/5)

3. BLUESTONE COMPANY

Income Statement (partial)

For the year ending December 31

Amortization Expenses:

Patent $200

Licensing Rights $14,000

Trademark expense $7,500

BLUESTONE COMPANY

Balance sheet (partial)

At December 31

Intangibles:

Patent                       $3,200

Acc. Amortization         200    $3,000

Licensing Rights  $70,000

Acc. Amortization   14,000   $56,000

Explanation:

a) Data and Calculations:

a. Purchased patent on January 1 for $3,200 Estimated life 16 years

b. Internally developed trademark is expensed: $7,500

c. Purchasing Licensing Rights on January 1 for $70,000 for 5 years

7 0
2 years ago
An idea from monetarism that has been absorbed into mainstream macroeconomics would be the Multiple Choice effects of aggregate
vladimir1956 [14]

Answer:

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Explanation:

5 0
2 years ago
Germaine operates a florist shop in a busy section of town in which there are many competing florists, each selling somewhat uni
trasher [3.6K]

Germaine is operating in a perfectly competitive market. As there are many competing florists, each selling somewhat unique floral arrangements, earning zero economic profits in the long run.

<h3>What is perfectly competitive market?</h3>

Perfectly competitive market is considered when all the competitors have same items and has no influence on pricing, and companies can enter and exit the market at any moment.

The market without restriction, customers have perfect or complete information, and companies are unable to set prices, according to economic theory.

Thus, the situation is of perfectly competitive market.

For more details about perfectly competitive market, click here

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4 0
2 years ago
During times of rising prices, which of the following is not an accurate statement?a. Average costing will yield results that ar
Levart [38]

Answer:d. LIFO will result in higher income taxes than FIFO

Explanation:

A period of rising prices means price will be higher on the latter goods than the former, inventory sold on Last in first out method (LIFO) will be costlier in this period than inventory sold on First in First out ( FIFO) this invariably means LIFO will result in lower net income due to high cost of inventory compared to FIFO and the lower the net income the lower the income tax this invariably means LIFO will result in lower income tax.

Average costing will yield result that are between those of LIFO and FIFO since it can an average of two price with one LIFO and the other on FIFO, LIFO will result in higher cost of goods sold since the latter goods will be costlier, FIFO will result in higher net income since the goods will be cheaper than LIFO.

5 0
3 years ago
Rockville, Inc. which uses a job costing system, began business on January 1, 20X3 and applies to manufacture overhead on the ba
Elan Coil [88]

Answer:

Rockville's ending WIP inventory=  $ 135,000

Rockville's COG Manufactured  Total Cost of Goods Manufactured = $ 815,000

Net Income  $ 793,800

Explanation:

<u>Rockville, Inc. </u>

Budgeted Direct Labor $200,000

Manufacturing Overhead  $250,000,

Job number DM DL

#1 $145,000 $35,000

#2 320,000 65,000

#3 55,000 80,000

Rockville's ending WIP inventory= Job#3 = Direct Materials + Direct Labor = 55,000 +  80,000=  $ 135,000

Rockville's COG Manufactured

= Job #1 + Job #2= Direct Materials + Direct Labor = $145,000 + $35,000 + 320,000 + 65,000= 565,000

Applied Overhead $250,000

Total Cost of Goods Manufactured = $ 815,000

Less Ending Inventory $ 135,000

Cost of Goods Sold= $ 500,000

Actual Manufacturing Overhead = $ 233,000

Applied Overhead $250,000

Less Over applied Overhead $ 17,000

Adjusted Cost of Goods Sold $ 483,000

Rockville's income statement.

Sales $ 798,000*1.6=   $ 1276,800

<u>Less COGS $ 483,000</u>

<u>Net Income  $ 793,800</u>

7 0
3 years ago
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