All categories

3 years ago

Statement of Cash Flows (Indirect Method)

Business

1 answer:

tatiyna3 years ago

3 0

Answer:

Cash Flow from Operating Activities

Net Income $114,000

<em>Items to convert net income to cash basis</em>

Depreciation $43,500

Amortization $9,000

Gain on Sale of Equipment -$6000

Accounts Receivable Increase -$6000

Inventory Decrease $19500

Prepaid Expenses Increase -$3000

Accounts Payable Increase $13500

Accrued Liabilities Decrease -$4500

Cash Flow Provided by Operating Activities A $180,000

Cash Flow from Investing Activities

Sale of Equipment $25,500

Purchase of Land -$135,000

Cash Used by Investing Activities B -$109,500

Cash Flow from Financing Activities

Issuance of Common Stock $52,500

Retirement of Bonds Payable -$90,000

Payment of Dividends -$43,500

Cash Used by Financing Activities C -$81,000

Net Decrease in Cash(A+B+C) -$10,500

Cash at Beginning of Year $33,000

Cash at End of Year $22,500

b. Operating cash flow to Current liabilities ratio = Operating Activities Cash Flow / Average current liabilities

Operating cash flow to Current liabilities ratio = $180,000 / $150,000

Operating cash flow to Current liabilities ratio = 1.2

You might be interested in

Ajax Corp.'s sales last year were $435,000; its operating costs were $362,500; and its interest charges were $12,500. What was t

diamong [38]

its operating costs were $362,500

<h3>What is operating costs?</h3>

Operating costs, also known as operational costs, are expenses related to the operation of a business or a device, component, piece of equipment, or facility. They are the expenses incurred by an organization in order to continue to exist.

The ongoing expenses incurred from the normal day-to-day operations of a business are referred to as operating costs. Operating expenses include both costs of goods sold (COGS) and other operating expenses, which are commonly referred to as selling, general, and administrative (SG&A) expenses.

An operating expense is a cost incurred by a company as a result of its normal business operations. Operating expenses, also known as OPEX, include rent, equipment, inventory costs, marketing, payroll, insurance, step costs, and funds set aside for research and development.

To know more about operating costs follow the link:

brainly.com/question/14697297

#SPJ4

7 0

1 year ago

A quotation representing the value of the dollar in terms of foreign currency is a(n) ____ quotation; a quotation representing

Black_prince [1.1K]

Answer:

direct; indirect

Explanation:

Foreign exchange quotations, relative prices or rates quoted among players in foreign exchange markets.

There are 3 types of foreign currency quotations :

Direct quote: Direct quote is the unit price of a country quoted in reference to the country's currency.
Indirect quotation: Indirect quotation is the reverse of direct quotation. This is the unit price of a country's currency known as foreign exchange terms.
Cross-Rates: Although the banks deal with non-bank customers in the convertible currency for the French Franc / Italian lira, the Sterling / Spanish Fiesta, the Swiss franc / French franc and so on, the interbank market is usually in US quotes against the dollar.

4 0

3 years ago

First Link Services granted 4.4 million of its $1 par common shares to executives, subject to forfeiture if employment is termin

EastWind [94]

Answer and Explanation:

First Link Services granted

1. Total compensation

$4.4 million × $5

=$ 22 million

Dr Compensation Expenses 11 million

Cr Paid in capital restricted stock 11 million

Dr Paid in capital restricted stock 22 million

Cr Common stock 4.4 millon

Cr Paid in capital excess of 17.6 million

5 0

3 years ago

Ortega Industries manufactures 15,000 components per year. The manufacturing cost of the components was determined to be as foll

grandymaker [24]

Answer:

Decrease by $30,000

Explanation:

Cost to buy = 15,000 * $34

Cost to buy = $510,000

Note: Since Ortega is buying 15000 units at $34, the $40,000 avoidable cost on fixed manufacturing overhead is non-applicable.

Cost of making = $150,000 + $240,000 + $90,000

Cost of making = $480,000

So, if Ortega purchases the component from the supplier instead of manufacturing it, the effect on income would be decrease by $30,000 ($510,000-$480,000).

8 0

3 years ago

Quickie Inc., a perfectly competitive firm, currently maximizes profit by producing 400 units of output. If its marginal cost is

jeka94

Answer:

economic profit = $2000

Explanation:

given data

currently maximizes profit = 400 units

marginal cost = $25

average total cost = $20

to find out

earning economic profit

solution

first we get here Total revenues that is express as

Total revenues = currently maximizes profit × marginal cost

Total revenues = 400 × $25

Total revenues = $10000

and Total cost will be

Total cost = currently maximizes profit × average cost

Total cost = 400 × $20

Total cost = $8000

so economic profit will be

economic profit = Total revenues - Total cost

economic profit = $10,000 - $8,000

economic profit = $2000

8 0

3 years ago