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What would the impact of amortization be on operating cash

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Reference no: EM132823250

The company in the following question has made errors in accounting for the given transaction. State how these errors affected the financial statements. Your response should include both the direction of the effect (understatement / overstatement) and the amount of the effect for assets, liabilities, and shareholders' equity. If your response is "No Effect", please choose this option - no partial credit will be given for blank responses even if you "meant" no effect. (Hint: Think about what the correct way (or amounts) of accounting for the transaction would be, and compare it to what the company in the question actually did).

Question 1: Assume that Illini Chemicals had, instead of amortizing 20 percent of the R&D costs (as stated in the previous question), amortized 40 percent of the R&D costs during 2020. What would the impact of this amortization be on operating cash flows for the 2020 fiscal year (ignoring the impact of taxes)?

Reference no: EM132823250

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