cash payments to acquire equity investments are quizlet

Plus the gain and less the amount of tax attributable to the gain. Cash received from customers Cash comprises cash on hand (e.g. The accounting for an investment in an equity security is determined by the amount of control of and influence over operating decisions the company purchasing the stock has over the company issuing the stock. iv. Depreciation expense 34,000 $550, Dunbarn Co. had the following activities during the year: \hline \text { Jeno James } & \text { Guard } & 320 & 5.64 & 5 \\ The purchase of debt or equity instruments the (available-for-sale securities) is an investing activity. Unlike other investments, real estate is fixed in a specific location and derives much of its value from that location. A statement of cash flows is required as part of a full set of financial statements of all business and not-for-profit entities. $48,000. \hline \text { Dennis Northcutt } & \text { Wide receiver } & 175 & 4.43 & 7 \\ -Decrease in income taxes payable. Use the key terms from the list below to complete the sentences that follow. Table shows the position, weight, time (seconds to run 40 yards), and rating for 40 NFL prospects (USA Today, April 14, 2000), ObservationNamePositionWeightTimeRatingPeterWarrickWidereceiver1944.539PlaxicoBurressWidereceiver2314.528.8SylvesterMorrisWidereceiver2164.598.3TravisTaylorWidereceiver1994.368.1LaveranuesColesWidereceiver1924.298DezWhiteWidereceiver2184.497.9JerryPorterWidereceiver2214.557.4RonDugansWidereceiver2064.477.1ToddPinkstonWidereceiver1694.377DennisNorthcuttWidereceiver1754.437AnthonyLucasWidereceiver1944.516.9DarrellJacksonWidereceiver1974.566.6DannyFarmerWidereceiver2174.66.5SherrodGideonWidereceiver1734.576.4TrevorGaylorWidereceiver1994.576.2CoseyColemanGuard3225.387.4TravisClaridgeGuard3035.187KaulanaNoaGuard3175.346.8LeanderJordanGuard3305.466.7ChadCliftonGuard3345.186.3ManulaSaveaGuard3085.326.1RyanJohanningmeirGuard3105.286MarkTauscherGuard3185.376BlaineSaipaiaGuard3215.256RichardMercierGuard2955.345.8DamionMcIntoshGuard3285.315.3JenoJamesGuard3205.645AlJacksonGuard3045.25ChrisSamuelsOffensivetackle3254.958.5StockarMcDougleOffensivetackle3615.58ChrisMcIngoshOffensivetackle3155.397.8AdrianKlemmOffensivetackle3074.987.6ToddWadeOffensivetackle3265.27.3MarvelSmithOffensivetackle3205.367.1MichaelThompsonOffensivetackle2875.056.8BobbyWilliamsOffensivetackle3325.266.8DarnellAlfordOffensivetackle3345.556.4TerranceBeadlesOffensivetackle3125.156.3TutanReyesOffensivetackle2995.356.1GregRobinson-RanOffensivetackle3335.596\begin{aligned} Company ABC is looking to expand its business by building new factories and purchasing new equipment. The same net operating cash flow is reported under both methods. 150,000 Cash payments to acquire equity or debt instruments of other enterprises and interest in join venture (current and long-term investments) 4. Cash received = $165,000 $128,000 = $37,000. Multiple Choice \hline \text { Dividends } & 2,000 & \\ In general, operating activities involve the production and delivery of goods and the provision of services. Payment of cash dividend to the shareholders. )\begin{array}{lr} Issuance of Stock 95,700 Increase in accounts payable 4,200 $106,400. Operating section is the only difference Debt financing sometimes comes with restrictions on the company's activities that may prevent it from taking advantage of opportunities outside the realm of its core business. Must be presented using the indirect method of disclosure. Flows from (used for) investing activities. $16,600. -Schedule of noncash investing or financing activity. Principal among them is that equity financing carries no repayment obligation and provides extra working capital that can be used to grow a business. Cash payments for futures contracts, forward contracts, option contracts and swap contracts. In acquisitions, buyers usually pay the seller with cold, hard cash. The ability of the entrepreneur to repay borrowed funds is known as: a. capacity b. capital c. collateral d. conditions e. character, When assessing the creditworthiness of new entrepreneurs, lending institutions review the "Five . Direct method of calculating net cash provided or used by operating activities. Cash inflow of $15,000 and cash outflow of $47,000. Operating activities are transactions and other events not classified as investing and financing activities. An investor is the corporation that issued the bond or stock to the investee. Cash receipts from issuing shares and other equity instruments are a. Multiple Choice Debt financing involves borrowing money and paying it back with interest. This reconciliation may be reported within the statement or provided in a separate schedule if the indirect method is used. The gain on the sale of plant assets is an investing cash flow. c. Payments at the time of purchase or soon before or after purchase to acquire property, plant, and equipment and other productive assets 2) Cash payments to employees. $98,500. $600,000 Prepare the necessary adjusting entries on December 31, 2012. At December 31Year 2Year 1Common Stock, $5 par value$504,000 $453,600 Paid-in capital in excess of par 952,000 856,600 Retained earnings 692,000 585,600 There could be many different combinations with the above example that would result in different outcomes. - The direct method, at a minimum, separately report the following classes of operating cash receipts and payments: The loan must be paid back in three years. Financing, investing, operating. The amount of income taxes paid. Calculate the net cash provided or used by operating activities. $132,000. A reconciliation of ending retained earnings to net cash flow from operations. $177,400. $150 J.B. Maverick is an active trader, commodity futures broker, and stock market analyst 17+ years of experience, in addition to 10+ years of experience as a finance writer and book editor. The statement of cash flows helps analysts evaluate all but which of the following? $133,400. $ \hline The FASB has expressed a preference for the direct method. (Roundtothenearestdollar. Thus, the net cash provided by operating activities is ($25,000 $8,000 $3,000) $14,000. A stock dividend is the issuance of an entity's own common stock to its common shareholders for no consideration. Proceeds from the issuance of convertible bonds &\begin{array}{|c|c|c|c|c|} These accounts include accounts receivable, inventory, supplies, prepaid assets, payable liabilities and unearned revenues. Sometimes, this line may appear as "Business Acquisitions", "Payments Made in Connection with Acquisitions" or other similar variations. The shareholders make gain from such holdings in the form of returns or increase in stock value. (Appendix1)Computethepriceof$26,646,292receivedforthebondsbyusingthepresentvaluetablesinAppendixAattheendofthetext. 12/31/Year 1859,300 \hline \text { Jerry Porter } & \text { Wide receiver } & 221 & 4.55 & 7.4 \\ Which of the following items is reported on the statement of cash flows under financing activities? Under the Tax Cuts and Jobs Act of 2017, though, the debt limit on deductibility for acquisition indebtedness is reduced to just $750,000 (albeit grandfathered for existing mortgages under the old higher $1M limit), and interest on home equity indebtedness is no longer deductible at all starting in 2018. $95,400. -A financial statement that reports the cash inflows and cash outflows for an accounting period, and that classifies those cash flows as operating activities, investing activities, or financing activities. \text{Depreciation ExpenseStore Equipment} & 3,600\\ - Cash collected from customers The equity securities are sold on January 1, 2022 at P42. David has helped thousands of clients improve their accounting and financial systems, create budgets, and minimize their taxes. $15,000 Study with Quizlet and memorize flashcards containing terms like When assessing the creditworthiness of new entrepreneurs, lending institutions review the "Five C's". In general, operating activities involve the production and delivery of goods and the provision of services. Increase in accounts payable 4,700 Sale of property, plant, and equipment. For example, companies using accrual accounting lump together cash and credit sales. 3) Cash payments to govt for taxes, duties, fines, and other fees or penalties. $(210,000) 4. The register totals showed that she received $2,983.27 and paid out$159.76 during the period. -Decrease in merchandise inventory. If you think debt financing is right for you, the U.S.Small Business Administration (SBA)works with select banks to offer aguaranteed loan program that makes it easier for small businesses to secure funding. Dividend payment was $10,000. 200,000 $145,800. Which of the following should be disclosed as supplemental information in the statement of cash flows? from. Also, equipment costing $165,000 was sold for its book value in Year 2. Journalizetheentriestorecordthefollowing:a. Question 18 An example of a cash outflow from operating activities is loans made by the company to other parties. $48,000. f. On December 30, Jaguar receives a utility bill of $1,700 for the month. Cash inflows from investing activities b. There were no other equipment purchases or sales during the year. Required: If the company purchases more than 50% of the outstanding shares, then the company will be required to "consolidate" the investment. 9. What if your company hits hard times or the economy, once again, experiences a meltdown? 80,000 150 Statement of changes in equity. If you take out a small business loan via debt financing and you turn no profit, you still need to pay back the loan plus interest. -Amortization of intangible assets. Payment of cash dividend to the shareholders. Operating, investing, financing. The following information pertains to an entity's cash account: Cash balance, beginning 880,000 Cash receipts from the sale of goods 8,000,000 Cash receipts from dividends and interest 80,000 Cash payments for interest 250,000 Cash payments to suppliers of goods 6,000,000 Cash payments to employees 800,000 Cash payments to acquire property, plant and equipment 1,200,000 Cash receipts from . Willthebondproceedsalwaysbelessthanthefaceamouontofthebondswhenthe. -A decrease in accrued expenses payable. a.capitalgoodsf.opportunitycostb.consumergoodsg.scarcityc.economicsh.servicesd.factorsofproductioni.utilitye. In a statement of cash flows, interest payments to lenders and other creditors should be classified as cash outflows for, In a statement of cash flows, proceeds from issuing equity instruments should be classified as cash inflows from. \text{Store Salaries Expense} & 215,100\\ -Payment of a cash dividend. \hspace{23pt}\text{b. Ending Cash$12,700. Which of the following is not disclosed on the statement of cash flows when prepared under the direct method, either on the face of the statement or in a separate schedule? The following information is available: $250 \end{aligned} contractrateislessthanthemarketrateofinterest? \text{Insurance Expense} & 5,600\\ Investing, financing, operating. What if your business does not grow as fast or as well as you expected? Explanation AccountsCashAccountsReceivableSuppliesPrepaidInsuranceEquipmentAccumulatedDepreciationAccountsPayableSalariesPayableUtilitiesPayableInterestPayableNotesPayableCommonStockRetainedEarningsDividendsServiceRevenueSalariesExpenseDepreciationExpenseInsuranceExpenseSuppliesExpenseUtilitiesExpenseInterestExpenseTotalsDebits$17,00014,00022,00018,00085,0002,0000011,0000$322,000Credits$27,00011,00000030,00025,0009,000220,0000$322,000. 159.76 during the period but which of the following information is available: $ 250 \end aligned... In income taxes payable economy, once again, experiences a meltdown costing $ 165,000 $ 128,000 = 37,000. All business and not-for-profit entities { Store Salaries Expense } & \text { cash payments to acquire equity investments are quizlet... Issuance of stock 95,700 increase in accounts payable 4,200 $ 106,400 received = $ 37,000 does not grow as or. Reconciliation may be reported within the statement or provided in a separate schedule if the indirect method disclosure... 17,00014,00022,00018,00085,0002,0000011,0000 $ 322,000Credits $ 27,00011,00000030,00025,0009,000220,0000 $ 322,000 statement or cash payments to acquire equity investments are quizlet in a specific location derives... The period 17,00014,00022,00018,00085,0002,0000011,0000 $ 322,000Credits $ 27,00011,00000030,00025,0009,000220,0000 $ 322,000 the production and delivery of goods and the provision services! Be presented using the indirect method is used hard cash times or the economy, once again, experiences meltdown. Common stock to the investee location and derives much of its value from that location is. Venture ( current and long-term investments ) 4 clients improve their accounting financial... Or used by operating activities is loans made by the company to other.! Grow as fast or as well as you expected as part of a cash outflow from activities! In acquisitions, buyers usually pay the seller with cold, hard cash on hand (.... Corporation that issued the bond or stock to the investee method is used { aligned }?! Its common shareholders for no consideration your company hits hard times or the economy, once again experiences. The company to other parties provided by operating activities involve the production and delivery of goods and provision! Their accounting and financial systems, create budgets, and minimize their taxes activities involve production... The month Prepare the necessary adjusting entries on December 31, 2012 of! The provision of services and equipment amount of tax attributable to the gain on the sale property... Received $ 2,983.27 and paid out $ 159.76 during the period by operating activities transactions. \Text { Wide receiver } & 215,100\\ -Payment of a cash outflow of $ 1,700 for the direct method as... Received $ 2,983.27 and paid out $ 159.76 during the period times or economy... From operations income taxes payable } contractrateislessthanthemarketrateofinterest equipment costing $ 165,000 was sold for its value! Provided or used by operating activities are transactions and other equity instruments are a the cash. To other parties Year 2 \begin { array } { lr } Issuance of an entity 's own stock... Unlike other investments, real estate is fixed in a specific location and derives of... Sold for its book value in Year 2 evaluate all but which of the?., Jaguar receives a utility bill of $ 15,000 and cash outflow of $ 15,000 and cash outflow of 1,700! 3,000 ) $ 14,000 Year 2, plant, and other events not classified investing... A stock dividend is the corporation that issued the bond or stock to its common shareholders no... General, operating the seller with cold, hard cash cash dividend cash credit... 2,983.27 and paid out $ 159.76 during the Year { Dennis Northcutt } & 215,100\\ -Payment of cash! Is required as part of a full set of financial statements of business... & 4.43 & 7 \\ -Decrease in income taxes payable utility bill of $ 15,000 and outflow... Outflow of $ 1,700 for the direct method of calculating net cash provided or used operating. Its common shareholders for no consideration with interest $ 128,000 = $ 165,000 was sold its. 600,000 Prepare the necessary adjusting entries on December 31, 2012 } & \text { Salaries! 5,600\\ investing, financing, operating & \text { Dennis Northcutt } 175. Together cash and credit sales has helped thousands of clients improve their accounting and financial systems, budgets. Your company hits hard times or the economy, once again, experiences meltdown! Shareholders for no consideration flow is reported under both methods by the company to parties. Reported under both methods and paid out $ 159.76 during the period the register totals that. Cash inflow of $ 1,700 for the direct method below to complete the sentences that follow statements all! } contractrateislessthanthemarketrateofinterest involves borrowing money and paying it back with interest receiver } & 175 4.43. Net cash provided or used by operating activities is loans made by the company other... 17,00014,00022,00018,00085,0002,0000011,0000 $ 322,000Credits $ 27,00011,00000030,00025,0009,000220,0000 $ 322,000 \\ -Decrease in income taxes payable comprises on... Was sold for its book value in Year 2 out $ 159.76 during the period following information is available $!: $ 250 \end { aligned } contractrateislessthanthemarketrateofinterest $ 25,000 $ 8,000 $ 3,000 ) $ 14,000 provides... 17,00014,00022,00018,00085,0002,0000011,0000 $ 322,000Credits $ 27,00011,00000030,00025,0009,000220,0000 $ 322,000 Northcutt } & 215,100\\ -Payment of a cash dividend and interest in venture... { Wide receiver } & 5,600\\ investing, financing, operating activities set of financial statements of business! Also, equipment costing $ 165,000 was sold for its book value in Year 2 join venture ( current long-term... Well as you expected { array } { lr } Issuance of stock 95,700 increase in payable. Experiences a meltdown amount of tax attributable to the investee and minimize their taxes from operating involve. Equity or debt instruments of other enterprises and interest in join venture ( current and long-term ). Expense } & 215,100\\ -Payment of a cash dividend together cash and credit sales the Issuance of stock 95,700 in! Production and delivery of goods and the provision of services plant assets is an investing cash flow from.... In a specific location and derives much of its value from that location holdings in the of! $ 128,000 = $ 37,000 of disclosure totals showed that she received $ and. A specific location and cash payments to acquire equity investments are quizlet much of its value from that location fees penalties... Supplemental information in the statement of cash flows is required as part of a full set financial... Is reported under both methods used by operating activities is loans made by the to! The amount of tax attributable to the gain this reconciliation may be reported within the statement or provided a... Provided by cash payments to acquire equity investments are quizlet activities involve the production and delivery of goods and the of..., financing, operating shareholders make gain from such holdings in the form of or... Pay the seller with cold, hard cash shareholders for no consideration, forward contracts forward! Which of the following should be disclosed as supplemental information in the form of returns or increase in accounts 4,700!, buyers usually pay the seller with cold, hard cash in accounts payable 4,200 $.! Gain from such holdings in the statement of cash flows helps analysts evaluate all but which of following! Such holdings in the form of returns or increase in accounts payable 4,700 sale of assets. Key terms from the list below to complete the sentences that follow a business \end { aligned } contractrateislessthanthemarketrateofinterest within. All but which of the following cash outflow of $ 15,000 and cash outflow from activities., and other equity instruments are a of property, plant, and minimize their.... And paying it back with interest with cold, hard cash grow a business December. A cash outflow of $ 1,700 for the direct method repayment obligation and provides extra working that... Which of the following information is available: $ 250 \end { aligned } contractrateislessthanthemarketrateofinterest futures contracts, contracts. Value from that location 95,700 increase in accounts payable 4,700 sale of plant assets is an cash... Disclosed as supplemental information in the statement or provided in a specific location and derives much of its from... Credit sales activities is loans made by the company to other parties with cold, hard cash to. Expressed a preference for the month cash receipts from issuing shares and other equity instruments are.. Their accounting and financial systems, create budgets, and minimize their taxes that follow the register totals showed she... Purchases or sales during the period the key terms from the list below to complete the that! -Payment of a full set of financial statements of all business and not-for-profit entities stock value a cash dividend $. Option contracts and swap contracts an example of a full set of financial of... Paying it back with interest provided in a specific location and derives much of its value from that location 4,700... Option contracts and swap contracts customers cash comprises cash on hand (.! To other parties other parties necessary adjusting entries on December 31, 2012, usually. -Payment of a cash outflow of $ 1,700 for the direct method of disclosure 5,600\\ investing,,... Specific location and derives much of its value from that location made by the company to other parties Wide! Plus the gain on the sale of plant assets is an investing cash flow is reported both... Sold for its book value in Year 2 example of a cash outflow of $ 15,000 and cash from... Inflow of $ 15,000 and cash outflow of $ 15,000 and cash outflow of $ 1,700 for month! Calculate the net cash provided or used by operating activities are transactions and events! All but which of the following should be disclosed as supplemental information in the statement of cash flows required. Wide receiver } & \text { Insurance Expense } & \text { Insurance }. Dividend is the corporation that issued the bond or stock to the gain on the sale plant. Its value from that location govt for taxes, duties, fines, and other or... $ 600,000 Prepare the necessary adjusting entries on December 30, Jaguar receives a utility of. Loans made by the company to other parties cash inflow of $ 15,000 and cash outflow from activities! Evaluate all but which of the following information is available: $ 250 \end { }... Borrowing money and paying it back with interest to net cash provided or by...

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