The implications which can be noted are as follows:
Here, $15,000(being Profit) signifies a cash inflow from operations.
Here, ($80000) denotes that there is a purchase of a long-term asset.
Here,$60,000 shows that common stock is issued during the year.
In the given case As per the analysis of given information & implications above.
The correct answer is Option (B): using cash from operations and issuing common stock to purchase long term assets.
Upon review of Make Your Mark, Inc.'s Statement of Cash Flows, the following was noted: Cash...
che QE 6-9 Statement of Cash Flow The following is a Statement of Cash Flows for the risk management internal service fund of the City of Wrightville. An inexperienced accountant prepared the statement using the FASB format rather than the format required by GASB. All long-term debt was issued to purchase capital assets. The transfer from the General Fund was to establish the internal service fund and provide the initial working capital necessary for operations. CITY OF WRIGHTVILLE Risk Management...
The following is a Statement of Cash Flows for the risk management internal service fund of the City of Wrightville. An inexperienced accountant prepared the statement using the FASB format rather than the format required by GASB. All long-term debt was issued to purchase capital assets. The transfer from the General Fund was to establish the internal service fund and provide the initial working capital necessary for operations. $ 930,000 (125,000) (729,100) 260,500 26,000 (15,500) 346,900 CITY OF WRIGHTVILLE Risk...
Upon review of Jan’s Lakeside Resort statement of cash flows, the following was noted:Cash flows from operating activities$ 35,000Cash flows from investing activities75,000Cash flows from financing activities(125,000)From this information, the most likely explanation is that Jan isA)using cash from operations and borrowing to purchase long-term assets. B)using its profits to expand growth. C)using cash from investors to provide for operations. Correct!D)using cash from operations and selling long-term assets to pay back debt.
Often, investors will examine the cash flow statement to understand how a company uses its cash to “fund” its operations and invest is long-term productive activities, such as property and machinery or to acquire businesses. Required:Explain the benefits of using cash generating from operations to fund operations and make long-term productive investments as compared with other forms of financing, such as long-term debt or by issuing common stock.
Required information The purpose of the statement of cash flows is to report major cash receipts and cash payments related to operating, investing, or financing activities. Operating activities include transactions and events that determine net income. Investing activities include transactions and events that mainly affect long-term assets. Financing activities include transactions and events that mainly affect long-term liabilities and equity. Noncash investing and financing activities must be disclosed In either a note or a separate schedule to the statement of...
AOS Industries Statement of Cash Flows for 2008 Operating activities Net Income 3.2 Depreciation and amortization 1.4 Cash effect of changes in Accounts receivable 2.1 Accounts payable 1.1 Inventory 0.8 Cash from operating activities 8.6 Investment activities Capital expenditures -2.2 Acquisitions and other investing activity -0.4 Cash from investing activities -2.6 Financing activities Dividends paid -1.5 Sale or purchase of stock 2.1 Increase in short-term borrowing 1.4 Increase in long-term borrowing 3.2 Cash from financing activities 5.2 Change in Cash and...
Following are a statement of cash flows (indirect method) for Harris, Inc., for the year ended December 31, 2017, and the firm’s balance sheet at December 31, 2016: HARRIS, INC. Statement of Cash Flows For the year Ended December 31, 2017 Cash Flows from Operating Activities: Net income $ 13,600 Add (deduct) items not affecting cash: Depreciation expense 32,000 Increase in accounts receivable (7,000 ) Decrease in merchandise inventory 32,800 Increase in accounts payable 4,900 Net cash provided by operating...
Agree or Disagree and Why? Learning objective: Explain the need for the statement of cash flows, and identify the three types of business activities presented in a statement of cash flows. The statement of cash flows is an important financial statement for a any business. Companies would want to know how the business is generating money. Tracking and recording transactions allows management to know how the cash is spent and where it comes from. In the statement of cash flows, all...
A statement of Cash Flows contains the following sections: Cash Flows from Operating Activities Cash Flows from Investing Activities Cash Flows from Financing Activities Investing and Financing Activities NOT affecting cash A list of items that appear on the Cash Flows Statement appear below: Using the letters (A-D), indicate in which section(s) of the statement of cash flows (or accompanying schedule) the preceding items would most likely be classified A Investing and Financing Activities NOT affecting cash B. Cash Flows...
Preparing a Statement of Cash Flows (Indirect Method) The following financial statements were issued by Hoskins Corporation for the fiscal year ended December 31, 2016. All amounts are in millions of U.S. dollars. Balance Sheets 2015 2016 $300 600 400 400 1,700 6,200 (2,100) 4,100 $5,800 $550 1,500 500 150 2,700 6,100 (1,750) 4,350 $7,050 Accounts Receiwable Prepaid Expenses Current Assets Property, Plant and Equipment at Cost Less Accumulated Depreciation Property, Plant and Equipment, Net Total Assets Liabilities and Shareholders...