How was everyone's day?

CA5-5 WRITING (Cash Flow Analysis) The partner in charge of the Kappeler Corporation audit comes by your desk and leaves a lette

zvonat [6]

Answer:

Explanation statement of cash flow for the year ended December 31.2017

Cash flow from operating activities

Net income 100,000

Add back depreciation 10,000

Add back amortization 1,000

Add back loss on asset sales 5,000

Increase in account receivable(40,000)

Increase in inventory (35,000)

Decrease in accounts payable (41,000) (100,000)

Net cash from operating activities 0

Cash flow from investing activities

Sales of land 25,000

Purchase of equipment (100,000)

Purchase of Land (200,000)

Net cash from investing activities (275,000)

Cash from financing activities

Payment of dividends (10,000)

Redemption of bonds (100,000)

Bet cash from financing activities (110,000)

Net decrease in Cash ( 385,000)

Cash balance in January 1, 2017 400,000

Cash balance in December 31 , 2017 15,000

<u>Workings</u>

1)

The disparity between the net income and the cash floe are as a result loss of cash to operating activities as a result of cash tied down to increase in receivable and inventory and also to an increase in payable leading to an overall cash generated by operating activities of 0

Moreover , a larger portion (300,000) of the opening cash balance(400,000) for the year was used in acquiring land and equipment and also 100,000 used in the redemption of bond. , even though this reduced the interest expense and improve equity , yet it was a big blow to the cash flow.

2)

The importance of cash flow is that it helps to analyse and monitor cash movement and cash available for the purpose of business activities towards liquidity and long term solvency.

3)

Renewable sources of cash flow are generated from the company's operating activities as the cash used for the financing and operating activities are generated from this medium.

4)

Suggestion to improve cash flow for Kappler are

Reduce the level of inventory held
Negotiate with the account payable for a longer trade payable payment period
Reduce the trade receivable collection period
Payment of dividends and redemption of bonds van be suspended till alter date when adequate cash is available
it can also negotiate for external sources of financing

4 0

2 years ago

The short run is defined as A. a period of time of five years or less. B. the period of time in which all factors of production

allochka39001 [22]

Answer:

C. the period of time in which at least one factor of production is fixed.

Explanation:

The short-run is a condition, were some controls and market are not in fair equilibrium, some factors like the variables and other that are foxed have limited entry or exit to the industry.

In the macroeconomics a long run is a time when the general price, and contractual wage rates, along with the expectations are adjusted entirely to the states of the economy. and this contrast to the short-run where the variable is not fully fixed or adjusted.

<u>The short-run for a firm will increase the production of the marginal costs is less than the marginal revenue. The transition from the short to the long-run market equilibrium may be done on considering the supply and demands.</u>

4 0

3 years ago

In the simplified model with proportional taxation introduced at the end of chapter 5, there can be two equilibria, one with a h

Radda [10]

Answer:

answer is given below

Explanation:

Equilibria with high tax rate.

In the high balance tax system, taxes are already high. Make government spending and revenue sources mandatory. and Tax rates decrease.

The income effect leads to an increase in both consumption and leisure, but when the alternative effect is taken into account, higher costs lead to greater employment and greater consumption but leave the party on leave.
Tax base witnesses grow. Output increases but relaxation decreases.

Equilibria with low tax rate:

An increase in government spending leads to an increase in tax rates to increase income sources.
The increase in taxes leads to a decline in consumption and production.
Therefore, the amount of time spent at rest will increase.

3 0

2 years ago

"Dave, I know that you are trained to work as a chemist and not to solve scheduling problems. But as lab manager, you are a fron

gizmo_the_mogwai [7]

Answer: D. supervisors gain experience in and are accountable for solving problems in their work units.

Explanation:

A chain of command is necessary in business because it diversifies authority such that decisions can be made faster.

It works by dividing employees into units which will answer to a manager. That manager will make decisions for the unit and this leads to decisions being made faster because everybody wouldn't have to go to upper management when they already have a manager.

Supervisors/ managers of these units are therefore accountable for their units and will gain experience from being so.

7 0

2 years ago

Merv Grazinski, driving his Winnebago, put it on cruise control to go make coffee. The Winnebago went off the road, turned over

Mars2501 [29]

Answer:

B). Contributory negligence

Explanation:

From the question we are informed about Merv Grazinski, who is driving his Winnebago, put it on cruise control to go make coffee. The Winnebago went off the road, turned over several times, and left Grazinski paralyzed from the waist down. He brings a product liability lawsuit against Winnebago. In this case, the best possible defense for Winnebago to use at trial Contributory negligence. Contributory negligence can be regarded as failure of plaintiff to have a tangible care for their own safety. Plantiff compensation could be reduced by Contributory negligence if confirmed that the occurrence of incident is likely as a result of their actions

7 0

2 years ago