Cash paid for interest is considered a(n) operating cash flows activity on the statement of cash flows.
<h3>What Is Operating Cash Flow (OCF)?</h3>
The amount of cash generated by a company's normal business operations is measured as operating cash flow (OCF). Operating cash flow indicates whether a company can generate enough positive cash flow to sustain and grow its operations; otherwise, external financing for capital expansion may be required. The cash impact of a company's net income (NI) from its primary business activities is represented by operating cash flow. The first section of the cash flow statement is operating cash flow, also known as cash flow from operating activities.
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Answer:
Retained earnings......................Dr $22,000
Dividend expense $22,000
Explanation:
There are two accounts, temporary and permanent accounts. Temporary accounts such as dividends and revenue need to be closed and charged against permanent accounts at the end of reporting period. This is done to estimate the total earnings of the firm during the period.
Dividends are charged to permanent account, retained earnings. Following is the closing entry:
Particulars Debit Credit
Retained earnings $22,000
Dividend expense $22,000
(Dividends expenses closed
by charging to retained earnings)
Answer:
A) 7.5%
Explanation:
To calculate Luther Industries' dividends growth rate we must use the following perpetuity formula:
Present Value = Dividend / (r - growth rate)
r - g = Div / PV
r = Div / PV + g
Where Dividend / Present value = 4.5%, and r = 12%, then:
12% = 4.5% + g
12% - 4.5% = g
g = 7.5%
Answer: D. Correlation analysis
Explanation:
Since she estimated the future sales of these textbooks by measuring the interconnection between sales and announcement of courses that recommend them, she's using correlation analysis of sales forecast.
Correlation analysis is used to show the relationship that exist between two quantitative variables. We should note that in this case, the dependent variable is sales while the independent variables will be the factors that bring about the fluctuation in sales.
A high correlation simply implies that there's a strong relationship between the variables while a weak correlation implies that the variables are not related.
Answer:
Shawnee Motors Inc.
Income Statement
For the month ended August 31, 202x
Sales revenue $1,000,000
- COGS <u> ($696,000)</u>
Gross profit $304,000
S&A expenses:
- Variable S&A expenses $140,200
- Fixed S&A expenses $54,300 <u>($194,500)</u>
Operating profit $109,500
Explanation:
Sales (10,000 units) $1,000,000
Production costs (13,000 units):
- Direct materials $481,000
- Direct labor $231,400
- Variable factory overhead $115,700
- Fixed factory overhead $76,700
- Total production costs $904,800
Selling and administrative expenses:
- Variable selling and administrative expenses $140,200
- Fixed selling and administrative expenses $54,300
- Total S&A expenses $194,500
COGS = (10,000 / 13,000) x $904,800 = $696,000