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Case Study 3 (Learning Objective 5: Construct and use a cash budget) Nathan Farmer, chief financial officer of Wang Appliance Store, is responsible for the company’s budgeting process. Farmer’s staff is preparing the Wang cash budget for 2014. A key input to the budgeting process is last year’s statement of cash flows, which follows (amounts in thousands): Wang Appliance Store Statement of Cash Flows 2013 (in thousands) Cash Flows from Operating Activities Collections from customers $51,000 Interest Received 500 Purchase of inventory (36,000) Operating expenses (10,200) Net cash provided by operating activities 5,300 Cash Flows from Investing Activities Purchase of equipment (3,500) Purchase of investments (500) Sale of investments 1,000 Net cash used for investing activities (3,000 ) Cash Flows from Financing Activities Payment of long term debt (400) Issuance of Stock 2,000 Payment of cash dividends (500) Net cash provided by financing activities 1,100 Cash Increase (decrease) in Cash 3,400 Cash, beginning of year 2,900 Cash, end of year 6,300 ? Requirements • 1. Prepare the Wang cash budget for 2014. Date the budget simply “2014” and denote the beginning and ending cash balances as “beginning” and “ending.” Assume the company expects 2014 to be the same as 2013, but with the following changes: o a. In 2014, the company expects a 20% increase in collections from customers and a 30% increase in purchases of inventory. o b. There will be no sales of investments in 2014. o c. Wang does not plan to issue stock in 2014. o d. Wang plans to end the year with a cash balance of $5,550.
Assume that IBM leased equipment that was carried at a cost of $150,000 to Sharon Swander Company. The term of the lease is 6 years beginning January 1, 2014, with equal rental payments of $30,044 at the beginning of each year. All executory costs ar..
Calcutron Company is contemplating introducing a new type of calculator to complement its existing line of scientific calculators.
look at the financial statements of the ford motor company. evaluate the following ratios for fordasset turnover profit
A company has a zero-coupon bond outstanding, with face value 1,000 and a 3 year maturity. The bond is risky with a beta of 0.7. The risk free rate is 2% and the market risk premium is 6%. There are two equally likely scenarios at maturity:
Buffalo Company reported a December 31 ending inventory balance of $412,000. The following additional information is also available: The ending inventory balance of $412,000 included damaged goods at their original cost of $38,000. The net realizable..
Compare revenue recognition criteria of U.S. GAAP and IFRS. Be prepared to give examples from real-life experiences, research, and/or readings
Liz contributed $80,000 of cash and land with a fair market value of $90,000 and an adjusted basis of $75,000. John contributed equipment with a fair market value of $170,000 and an adjusted basis of $20,000. John had previously used the equipment in..
Gen is interested in seeing how the money grows. Her mom suggests that she takes the money in her piggy bank and deposits it in a local bank paying 8.5% compounded quarterly. IF she finds $700 in the piggy bank, how much will it grow to in 10 years?
If you know that the company charges 26% interest on outstanding balances what should be the cash price, today, for the car?
Direct materials are placed into the process at the beginning of production. Determine the number of equivalent units of production with respect to direct matrials and conversion cost.
Prepare a lease amortization schedule for the entire lease period for the firm. (Round upyour figures to whole numbers).
On the assumption that the fair value of Hayden on December 31, 2010 was $1,650,000 instead of $2,400,000, determine the impairment loss, if any, to be recorded.
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