Analyze the transactions and indicate whether each transaction resulted in a cash flow from operating activities‚ investing activities‚ financing activities‚ or noncash investing and financing activities (a)Issued $50‚000 par value common stock for cash. Cash inflow; financing activities (b) Purchased a machine for $30‚000‚ giving a long-term note in exchange. noncash investing and financing activities (c) Issued $200‚000 par value common stock upon conversion of bonds having a face
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Cash Flow Statement is divided into three; cash flow from operating‚ investing and financing activities. With two approaches in constructing Cash Flow Statement; direct and indirect approach‚ the difference is basically on the construction of the first part‚ operating activities. Cash flow from operating activities are cash flow from principal revenue-producing activities of the company and other activities that are not investing or financing activities. In using the direct method approach‚ it would
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participating students invested in stocks of brand names and random companies. As the game fast forwarded with time‚ we all learned to do some research before investing in a random stock. Along the course of the game‚ certain positions exceed
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Earnings management is not always intended to produce higher income. The manipulation’s purpose is to give the illusion of a smooth income pattern. According to our text‚ “Most executives prefer to report earnings that follow a smooth‚ regular‚ upward path….It is better to have two years of 15% earnings increases than a 30% gain in one year and none in the next” (Spiceland‚ Sepe‚ & Nelson‚ 2011). Spiceland‚ J. D.‚ Sepe‚ J. F. & Nelson‚ M.W. (2011). Intermediate Accounting (6th ed.) The
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and will not be entering the private sector for a few more years‚ it will be difficult to predict how valuable and desirable the initial IPO will be. Though investing in a mutual fund is certainly no guarantee that your investments will increase in value over time‚ it’s a way to avoid some of the complicated decision-making involved in investing in stocks. Bledsoe Financial Services offers a couple of different large-capitalization stock options including the Bledsoe S&P 500 Index Fund and the Bledsoe
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in accounts payable ($63-$56) 7 Decrease in accrued liabilities ($17-$12) (5) 35 Net cash provided by operating activities 140 Cash flows from investing activities: Acquisition of property‚ plant and equipment ($61-$46=$15; $125-$15=$110) $(110) Acquisition of long-term investments (31) Net cash used for investing activities (141) Cash flows from financing activities: Issuance of common stock ($149-$61) $88 Payment of long-term notes payable ($264-$179) (85)
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holding in the bank. 3. A typical investment when investing cash for a short period of time would be a short term government security. 4. A typical investment when investing in cash to generate earnings would be investing in debt. 5. A company would invest in securities that provide zero cash flow for strategic reasons such as influence over customers or make presence known by a related company in the industry. 6. A typical stock investment when investing cash for strategic reasons would be in a related
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the ability of the entity to pay its bills and meet its obligations. The investing section tells us how a company is using its cash to grow long-term. If you see a lot of investments outflow‚ that means that the company is investing in capital projects that will sustain its earnings in the long-term. It gives information about the investing activities that are used with operating activities. The cash that goes into the investing activity of the firm is disclose by the cash flow statement. This includes
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investor‚ I am considering investing in one of two economies. The expected return with volatility of all stocks in both economies is the same. In the first economy‚ all stocks move together‚ in good times all prices rise together and in bad times they all fall together. In the second economy‚ stock returns are independent; one stock increasing in price has no effect on the prices of other stocks. Diversified Portfolio There are certain guidelines I need to consider when investing and creating a diversified
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Quiz Questions for Chapter 9 1. A truck was purchased for $25‚000. It has a six-year life and a $4‚000 salvage value. Using straight-line depreciation‚ what is the asset’s carrying value (book value) after 2 1/2 years? a. $8‚750. b. $12‚250. c. $14‚583. d. $16‚250. 2. On January 1‚ 2003‚ Superior Landscaping Company paid $17‚000 to buy a stump grinder. If Superior uses the grinder to remove 2‚500 stumps per year‚ it would have an estimated useful life of 10 years and a salvage value
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