Answer:
Cash flows from operating activities:
Net income $52,000
Adjustments to net income:
- Depreciation expense $30,000
- Accounts receivable increased by ($25,000)
- Inventories increased by ($5,000)
- Accounts payable decreased by ($18,000) <u>($18,000)</u>
Net cash flow provided by operating activities $34,000
Answer:
The correct answer is letter "D": first-in, first-out.
Explanation:
A business using the first-in, first-out (FIFO) inventory valuation approach must sell, use or dispose first of all the products it produced or acquired. According to the FIFO process, the most recent assets purchased or generated are those that remain in inventory. Older stock is first removed from inventory.
Answer:
$112,000
Explanation:
The Equity method shall be used in this question for determining book value of investment made by the Johnston company in Truly Inc because the investment gives the Johnston company the significant influence over the Truly Inc.
Under equity method, the book value of investment made by the Johnston company as at end of year 1 shall be determined as follow:
Amount invested initially $100,000
Add: Net income for the year $20,000
(50,000*40%)
Less: dividends received ($8,000)
(20,000*40%)
Book value of investment at end of year 1 $112,000
Answer:
He should reorder when he is left with 200 hammers.
Explanation:
Reorder point is the trigger which informs the businessmen to order the inventory when the stock is used.
Reorder point = Safety Stock + (Average daily usage of units * Average lead time in days )
Reorder Point = 0 + (100 hammers * 2 days)
Reorder Point = 200
