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kow [346]
3 years ago
13

Suppose we are looking at a cash flow statement constructed using the INDIRECT method. We see a NEGATIVE adjustment of $5000 rel

ated to Accounts Payable. Which of the following are correct interpretations of this?a. Depreciation provided cash of $1000 b. The firm sold long-term assets for $1000 c. The firm invested $1000 of cash in long-term assets d. Income was lower by $1000 because of Depreciation expense
Business
1 answer:
ozzi3 years ago
7 0

Answer:

It implies that the firm paid $5,000 to its supplier this accounting period (e.g. year) out of the amount the firm is owing the supplier.

Note: The correct answer is as stated above it is not included in the option. Kindly confirm the options again from your teacher.

Explanation:

Accounts payable refers to the amount of money a firm is owing its suppliers.

Account payable is one of the component of the current liabilities in the balance sheet, and non-cash current liability item that is adjusted for in the cash flow statement to arrive at net cash from operating activities when an indirect method is being used.

Since accounts payable is the amount of money a firm is owing its suppliers, a negative  a NEGATIVE adjustment to its implies that company has paid its supplier the negative amount in the accounting period.

Therefore, a NEGATIVE adjustment of $5000 related to Accounts Payable implies that the firm paid $5,000 to its supplier this accounting period (e.g. year) out of the amount the firm is owing the supplier.

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Jay, a single taxpayer, purchased an annulty to help provide income during his retirement. He paid $36,000 for the annuity that
Rufina [12.5K]

Answer:

d. All of the last 12 payments he received are taxable.

Explanation:

In the case when the life expectancy is 180 months and collected 192 payments prior he died

So according to the question, all the 12 payments would be received are taxable

Here the payment that received for 180 months would not be involved in the gross income and the remaining 12 payment would be taxable

Therefore the option d is correct

4 0
3 years ago
​Gulfcoast, Inc. purchased a van on January​ 1, 2019, for $ 900 comma 000. Estimated life of the van was five​ years, and its es
Zarrin [17]

Answer:

$740,200

Explanation:

Depreciation is the systematic allocation of the cost of an asset to the income statement over the estimated useful life of that asset.

It is determined as the depreciable value of the asset over the estimated useful life of the asset where the depreciable value is the difference between the cost and salvage value of the asset

Mathematically,  

Depreciation = (Cost - Salvage value)/Estimated useful life

Depreciation = (900,000 - 101,000)/5

= $159,800

Book value is the cost net accumulated depreciation

= $900,000 - $159,800

= $740,200

4 0
3 years ago
Star, Inc., a prominent consumer products firm, is debating whether or not to convert its all-equity capital structure to one th
Dmitry_Shevchenko [17]

Answer:

Explanation:

1)  The earnings per share are:

EPS = $39,100/17,000 shares

EPS = $2.30

Cash flow for the company is:

Cash flow = $2.30 X 150 shares

Cash flow = $345

2) Need to determine the EPS of the firm under the proposed capital structure. The market value of the firm is:

MV = $47*17,000  = $799,000

Under the proposed capital structure, the firm will raise new debt in the amount of  D = 0.20*$799,000 = $159,800 in debt. The number of shares repurchased will be:

Shares repurchased = $159,800/$47  = 3400

Under the new capital structure, the company will have to make an interest payment on the new debt. The net income with the interest payment will be:

NI = $39,100 – 0.065*$159,800  = $39100-10,387= $28,713

EPS under the new capital structure will be:

EPS = $28,713/13,600 shares  = $2.11

Shareholder cash flow = $2.11*150 shares  = $316.5

3)  In this case, capital structure is irrelevant because shareholders can create their own leverage or unlever the stock to create different capital structures. This has no connection with the capital structure that firm chooses.

6 0
3 years ago
Apple anticipates it will sell 100,000 units in the coming year. It is considering investing in a new machine that will increase
Vilka [71]

Incomplete question. However, it would be inferred you want to know the requirements to calculate net income.

<u><em>Explanation</em></u>:

Remember, net income is total revenue minus total cost. Since Apple anticipates selling 100,000 units, if we assume the fixed cost to be $2,400 and the variable cost $34, and selling price unit is $150.

  • Total cost= 2400+ (34*100,000)= 3,400,000
  • Total Revenue= 150*100,000= $15,000,000
  • Net income= 15,000,000-3,400,000= $11,600,000

The Net income is therefore $11,600,000.

7 0
3 years ago
Universal Containers sells through many different reseller networks. Each reseller's deals are tracked on separate opportunities
tatiyna

Answer: change the forecast category to omitted on the duplicate opportunities

Explanation:

The sales process should be modified to ensure opportunities are not double-counted in the pipeline by changing the forecast category to omitted on the duplicate opportunities.

When this is done, the multiple opportunities for the same end customer will be curtailed and hence, there'll be accuracy with regards to the pipeline report.

5 0
3 years ago
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