Public Administration - Municipal ACC106 Chapter Notes - Chapter 8.2: Negative Number, Floating Charge

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greenmuskrat329

3 Dec 2017

School

Seneca College

Department

Public Administration - Municipal

Course

Public Administration - Municipal ACC106

Professor

Riggs

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Document Summary

To finance additional inventory, arbutus ltd. is considering forgoing the cash discount on all of its purchases presently offered on terms of 2/10, net 45. Calculate the additional financing available to arbutus ltd by forgoing the cash discount. Calculate the annual cost of forgoing the cash discount. If a/r are greater than a/p, the firm is a net provider of trade credit. If a/p are greater than a/r, it is a net user of trade credit (negative. Larger firms tend to be net providers of trade credit, while smaller (positive number) number) firms are net users. A self-liquidating loan generates cash flows that form a built-in or automatic repayment scheme. Short-term loans take on the nature of longer-term financing through renewing arrangements. Demand loans are payable (or can be advanced) as desired and the interest rate fluctuates with prime. Prime rate: the interest rate charged to a bank"s best customers acts as a benchmark for calculating other interest rates.

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Total Current Asset Current Ratio Effect on Net Income

a		Cash is acquired through issuance of additional common stock		____		____		____
b	Merchandise is sold for cash		____		____		____
c	Federal income tax due for the previous year is paid		____		____		____
d	A fixed asset is sold for less than book value		____		____		____
e	A fixed asset is sold for more than book value		____		____		____
f	Merchandise is sold on credit		____		____		____
g	Payment is made to trade creditors for previous purchases		____		____		____
h	A cash dividend is declared and paid		____		____		____
I	Cash is obtained through short- term bank loans		____		____		____
J	Short- term notes receivable are sold at a discount		____		____		____
k	Marketable securities are sold below cost		____		____		____
L	Advances are made to employees		____		____		____
m	Current operating expenses are paid		____		____		____
n	Short- term promissory notes are issued to trade creditors in exchange for past due accounts payable		____		____		____
o	10- year notes are issued to pay off accounts payable		____		____		____
p	A fully depreciated asset is retired		____		____		____

4 DEBT RATIO- Bartley Barstools has an equity multiplier of 2.4, and its assets are financed with some combination of long-term debt and common equity. What is its equity ratio? What is its debt ratio?

6 MARKET/BOOK RATIO- Jaster Jets has $10 billion in total assets. Its balance sheet shows $1 billion in current liabilities, $3 billion in long-term debt and $6 billion in common equity. It has 800 million shares of common stock outstanding, and its stock price is $32 per share. What is Jaster

greenshark669

P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6

XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the
statement of cash flows. The completed comparative balance sheets and income statement are summarized:

		2014	2013
	Balance sheet at December 31
	Cash	$ 34,000	$ 29,000
	Accounts receivable	35,000	28,000
	Merchandise inventory	41,000	38,000
	Property and equipment	121,000	100,000
	Less: Accumulated depreciation	(30,000)	(25,000)

		$ 201,000	$ 170,000

	Accounts payable	$ 36,000	$ 27,000
	Wages payable	1,200	1,400
	Note payable, long-term	38,000	44,000
	Contributed capital	88,600	72,600
	Retained earnings	37,200	25,000

		$ 201,000	$ 170,000

	Income statement for 2014
	Sales	$ 120,000
	Gain on sale of equipment	1,000
	Cost of goods sold	70,000
	Other expenses	38,800

	Net income	$ 12,200

Additional Data:
a.	Bought equipment for cash, $31,000.
	Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash.
b.	Paid $6,000 on the long-term note payable.
c.	Issued new shares of stock for $16,000 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800.
f.	Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses,
	assume that these expenses were fully paid in cash.

Required:
1	Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method.
	(List cash outflows as negative amounts.)
	Possible input areas are shaded.

	XS SUPPLY COMPANY
	Statement of Cash Flows
	For the Year Ended December 31, 2014
	Cash flows from operating activities:

	Adjustments to reconcile net income to net cash provided by operating activities:






			-
	Net cash provided by operating activities		-
	Cash flows from investing activities:



			-
	Cash flows from financing activities:



			-


			$ -

ultramarineworm842

HUNTER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2015
Cash Flows from Operating Activities:

Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities:







Cash Flows from Investing Activities:



Cash Flows from Financing Activities:

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Hunter Company is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized:

	2015			2014
Balance Sheet at December 31
Cash	$	51,740		$	21,000
Accounts Receivable		32,400			35,000
Inventory		35,400			42,000
Equipment		117,600			108,000
Accumulated DepreciationâEquipment		(39,600	)		(33,000	)

	$	197,540		$	173,000

Accounts Payable	$	28,600		$	25,000
Salaries and Wages Payable		740			1,000
Note Payable (long-term)		44,000			54,000
Common Stock		89,000			66,000
Retained Earnings		35,200			27,000

	$	197,540		$	173,000

Income Statement for 2015
Sales Revenue	$	106,000
Cost of Goods Sold		64,000
Other Expenses		29,400

Net Income	$	12,600

Additional Data:
a.	Bought equipment for cash, $9,600.
b.	Paid $10,000 on the long-term note payable.
c.	Issued new shares of stock for $23,000 cash.
d.	Declared and paid a $4,400 cash dividend.
e.	Other expenses included depreciation, $6,600; salaries and wages, $10,600; taxes, $3,600; utilities, $8,600.
f.	Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Required:
1.	Prepare the statement of cash flows for the year ended December 31, 2015, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

crimsonoyster639

Public Administration - Municipal ACC106 Chapter Notes - Chapter 8.2: Negative Number, Floating Charge

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