Business and Finance

Sigchi4life
Category:
Accounting
Price: $10 USD

Question description

1. Discussion Question

Indicate under which activity (operating, financing, investing) the following accounts belong in the statement of cash flows:

Activity

Trade receivables______________________

Land______________________

Mortgage payable______________________

Profit for the year______________________

Trade and other payables______________________

Depreciation/amortization______________________

Inventories______________________

Prepaid expenses______________________

Share capital (common)______________________

Buildings______________________

Accrued expenses______________________

Current taxes payable______________________

Equipment______________________

Long-term borrowings______________________

Purchase of a company______________________

Dividends______________________

Share capital (preferred) ______________________


2. Professional Assignment

Copy and complete the following assignment into a new document. As this assignment is problem-based, no 2-3 page paper or ppts will be required. However, you should provide a summary that explains sources of finance, and other accounting principles learned thus far.

Identify, under the appropriate heading, whether the following changes are an inflow of cash or an outflow of cash. What amounts and percentages were used by internal and external sources to finance the purchase of the assets?

(in $)This Year Last Year Cash Inflows Cash Outflows

House134,600  130,000__________________

Trailer 12,000 -- __________________

Furniture 5,600  4,000__________________

Salary in excess of expenses 5,000 --__________________

Mortgage 75,000  60,000__________________

RRSP 23,000  20,000__________________

Loan made to a friend -- 5,000__________________

Car loan 12,000  8,000__________________

Visa 1,250   600__________________

The Bay -- 450__________________

Cash in the bank 3,000   2,000__________________

Marketable securities 12,000   10,000__________________

Total$$________

 

3 Discussion Question 

Owners of a business are contemplating investing $550,000 in non-current assets in early January 2014.

They are exploring ways to finance it.

In 2012, the company had $250,000 in trade receivables, an amount that it expects will increase to $275,000 in 2013.

The inventory level for 2012 was $430,000 and, having introduced a new inventory management system, the owners expect to be more efficient in managing it.

They forecast a level of $370,000 in inventories by the end of 2013.

They expect a substantial increase in revenue, which will increase their profit from $150,000 in 2012 to $230,000 in 2013.

1.How much cash will be generated from internal operations by the end of 2013?

2.Will the owners have to borrow money from investors to finance the expansion? If yes, how much?

Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UC Berkeley
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