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6.ABC Company has determined that its electronic division is a cash generating unit. The company calculated the value in use of the division to be P8,000,000. The carrying amounts of the assets are as follows:
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- Required information E12-13 (Algo) (Supplement B) Computing and Reporting Cash Flow Effects of Sale of Plant and Equipment [The following information applies to the questions displayed below.] During two recent years, Perez Construction, Inc., disposed of the following plant and equipment: Year 1 $ 76,200 Plant and equipment (at cost) Accumulated depreciation on equipment disposed of Cash received Gain (loss) on sale E12-13 Part 1 42,785 20,264 (13, 151) Year 2 $15,900 4,973 14,563 3,636 Required: 1. Determine the cash flow from the sale of property for each year that would be reported in the investing activities section of the cash flow statement. (List cash outflows as negative amounts.)A machine with a cost of $138,000 and accumulated depreciation of $93,000 is sold for $54,000 cash. The amount that should be reported as a source of cash under cash flows from investing activities is: Multiple Choice $54,000. $9,000. $45,000. Zero. This is a financing activity. Zero. This is an operating activity.Sweeter Enterprises Inc. has net cash flows from operating activities of $378,000. Cash flows used for investments in property, plant, and equipment totaled $76,000, of which 65% of this investment was used to replace existing capacity. a. Determine the free cash flow for Sweeter Enterprises Inc. b. How might a lender use free cash flow to determine whether or not to give Sweeter Enterprises Inc. a loan? Free cash flow is often used to measure the financial strength of a business. The - free cash flow that a business has, the easier it will be for the company to pay the interest on the loan and repay the loan principal. Sweeter's free cash flow is $ which is very
- Problem 1. (Accounting for Joint Operation Transactions) Small, Medium, and Large formed a joint operation. The following were the joint operation transactions: a. Small transferred cash of P100,000 to Large, the appointed manager, representing Small's contribution. b. Medium contributed inventories worth P120,000. c. Large contributed cash of P80,000 d. Large purchased inventories worth P160,000 and paid freight of P20,000 using the cash contributions. e. Large made cash sales of P900,000. f. Large paid expenses of P240,000 from the JO-cash. Other information: • All inventories were sold except one-third from large's purchases. Large was charged for the cost of the unsold inventory. • The joint operators agreed on the following: o Large is entitled to a management fee of P6,000 and a bonus of 15% of profit after management fee and bonus. o Any remaining profit or loss is divided equally. Requirement: Case 1: No separate records are maintained a. Prepare the journal entries for…What is the Total Asset Turnover Ratio for a company with $120,000 in annual sales, beginning Assets of $250,000 and ending Assets of $200,000? .48 1.34 .26 .53 please give the correct answswer but only one is right.e xplain the correct naswer The efficiency ratio that shows how efficiently a company uses its cash to generate revenue is: Accounts Receivable Turnover Ratio. Total Asset Receivable Turnover Ratio. Cash Turnover Ratio. Inventory Turnover Ratio. please give the correct answswer but only one is right.e xplain the correct naswerGiven the following information, construct the firm’s balance sheet: Cash and cash equivalents $ 400,000 Accumulated depreciation on plant and equipment 660,000 Plant and equipment 5,400,000 Accrued wages 260,000 Long-term debt 4,210,000 Inventory 7,080,000 Accounts receivable 5,430,000 Preferred stock 550,000 Retained earnings 8,680,000 Land 1,070,000 Accounts payable 2,030,000 Taxes due 170,000 Common stock $ 10 par Common shares outstanding 238,000 Current portion of long-term debt $ 440,000 Round your answers to the nearest dollar. Corporation X Balance Sheet as of XX/XX/XX Assets Liabilities and Owners' Equity Cash and cash equivalents $ Accounts payable $ Accounts receivable Taxes due Inventory Accrued wages Total current assets $ Current portion of long-term debt $ Land Total current liabilities Plant and equipment Long-term debt…
- Q17: a) Acquisition of Assets for Cash, Master Corporation wants to buy certain fixed assets of Smith Corporation. However, Smith Corporation wants to dispose of its entire business. The balance sheet of Smith follows: ASSETS Cash $2,000 Accounts receivable 8,000 Inventories 20,000 Equipment 1 10,000 Equipment 2 20,000 Equipment 3 35,000 Building 90,000 Total assets $185,000 LIABILITIES AND STOCKHOLDERS' EQUITY Total liabilities $80,000 Total stockholders equity 105,000 Total liabilities and stockholders', equity $185,000 Master needs only equipment 1 and 2 and the building. The other assets excluding cash can be sold for $35,000, Smith wants $48,0X) for the entire business. It is anticipated that the after-tax cash inflows from the new equipment will he $30,000 a year for the next 8 years. The cost of capital is 12 percent. (1) What is the initial net cash outlay? (2) Should the acquisition be made?(i) Calculate the cash conversion cycle for Lala Electronics Sdn. Bhd.The capital investment committee of Ellis Transport and Storage Inc. is considering two investment projects. The estimated income from operations and net cash flows from each investment are as follows:
- Lovato Motors Inc. has cash flows from operating activities of $720,000. Cash flows used for investments in property, plant, and equipment totaled $440,000, of which 85% of this investment was used to replace existing capacity.Determine the free cash flow for Lovato Motors Inc.The Rogers Coporation has a gross profit of $776,000 and $332,000 in depreciation expense. The Evans Corporation also has $776,000 in gross profit, with $45,500 in depreciation expense. Selling and administrative expense is $256,000 for each company. a. Given that the tax rate is 40 percent, compute the cash flow for both companies. b. Calculate the difference in cash flow between the two firms.A liquid asset can be converted to cash quickly without significantly impacting the asset’s value. Which of the following asset classes is generally considered to be the most liquid? Accounts receivable Cash Inventories The most recent data from the annual balance sheets of Fitcom Corporation and Zebra Paper Corporation are as follows: Balance Sheet December 31st31st (Millions of dollars) Zebra Paper Corporation Fitcom Corporation Zebra Paper Corporation Fitcom Corporation Assets Liabilities Current assets Current liabilities Cash $2,870 $1,845 Accounts payable $0 $0 Accounts receivable 1,050 675 Accruals 633 0 Inventories 3,080 1,980 Notes payable 3,586 3,375 Total current assets $7,000 $4,500 Total current liabilities $4,219 $3,375 Net fixed assets Long-term bonds 5,156 4,125 Net plant and equipment 5,500 5,500 Total debt $9,375 $7,500 Common equity Common stock $2,031 $1,625…