Question

In: Finance

Ramon Company reports net income of $305,000 for the year ended December 31, 2019. It also...

Ramon Company reports net income of $305,000 for the year ended December 31, 2019. It also reports $93,700 depreciation expense and a $10,000 loss on the sale of equipment. Its comparative balance sheet reveals a $40,200 increase in accounts receivable, a $10,200 decrease in prepaid expenses, a $15,200 increase in accounts payable, a $12,500 decrease in wages payable, a $75,000 increase in equipment (cash is involved), and a $100,000 decrease in long - term notes payable (cash is involved). Calculate the increase in cash for Year ended December 31, 2019.
Select one:
a. $381,400.
b. $206,400.
c. $281,400.
d. $216,400.

Select one:
a. payment of dividends.
b. sale of treasury stock.
c. payment of principal amounts of long-term debt.
d. payment of interest on long-term debt


Please Solve As soon as
Solve quickly I get you two UPVOTE directly
Thank's
Abdul-Rahim Taysir

Solutions

Expert Solution

Ans) b. $206,400.

Increase in cash for Year ended December 31, 2019 = Net Income + Depreciation + Loss on sale of equipment + Working capital changes - Purchase of equipment - Repayment of loan

Net Income = $ 305000

Depreciation = $ 93700 ( Depreciation being non cash item should be added back to profit in order to arrive increase in cash)

Loss on sale of equipment = $ 10000 (Loss on sale of equipment should be added back to net income as i does not etail actual cash outflow)

Working capital changes

Particulars Incresase/Decrease in cash
Increase in Account receivables -40200
Decrease in prepaid expenses 10200
Increase in accounts payable 15200
Decrease in wages payable -12500
Total cash inflow/outflow due to EX changes -27300

Purchase of equipment = $ 75000

Repayment of loan = $ 100000

Thus  Increase in cash for Year ended December 31, 2019 = 305000 + 93700 + 10000 -27300 - 75000 - 100000

= 206400 $

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Reindeer Company reports net income of $390,000 for the year ended December 31, 2019. It also...
Reindeer Company reports net income of $390,000 for the year ended December 31, 2019. It also reports $70,000 depreciation expense and a $10,000 gain on the sale of machinery. Its comparative balance sheets reveal a $30,000 increase in accounts receivable, $16,000 increase in accounts payable, $8,000 decrease in prepaid expenses, and $12,000 decrease in wages payable. Required: Prepare only the operating activities section of the statement of cash flows for 2019 using the indirect method.
Lucas Company reports net income of $2,460 for the year ended December 31, 2016, its first...
Lucas Company reports net income of $2,460 for the year ended December 31, 2016, its first year of operations. On January 4, 2016, Lucas issued 9,000 shares of common stock. On August 2, 2016, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end. During 2017, Lucas earned net income of $17,400 . It issued 3,000 additional shares of stock on March 3, 2017, and declared and issued a 2-for-1 stock split on November 3,...
Ringmeup Inc. had net income of $112,800 for the year ended December 31, 2019. At the...
Ringmeup Inc. had net income of $112,800 for the year ended December 31, 2019. At the beginning of the year, 36,000 shares of common stock were outstanding. On May 1, an additional 14,000 shares were issued. On December 1, the company purchased 4,800 shares of its own common stock and held them as treasury stock until the end of the year. No other changes in common shares outstanding occurred during the year. During the year, Ringmeup paid the annual dividend...
Ringmeup Inc. had net income of $102,700 for the year ended December 31, 2019. At the...
Ringmeup Inc. had net income of $102,700 for the year ended December 31, 2019. At the beginning of the year, 36,000 shares of common stock were outstanding. On May 1, an additional 12,000 shares were issued. On December 1, the company purchased 4,500 shares of its own common stock and held them as treasury stock until the end of the year. No other changes in common shares outstanding occurred during the year. During the year, Ringmeup paid the annual dividend...
For the year ended December 31st, 2019, Tesla Inc. reports Net Loss (i.e., negative Net Income)...
For the year ended December 31st, 2019, Tesla Inc. reports Net Loss (i.e., negative Net Income) of - 775 million dollars in its Consolidated Statement of Operations (i.e., income statement). However, for the year ended December 31st, 2019, Tesla Inc. reports Net Cash Provided by Operations in its Consolidated Statement of Cash Flows (i.e., cash flow statement) of positive +2,405 million dollars. That means Operating Cash flows are $3,180 million (2405 + 775) greater than Net Income. What is the...
Information for Entity A for the year ended December 31, 2019 ($ in millions):    Income...
Information for Entity A for the year ended December 31, 2019 ($ in millions):    Income from continuing operations before tax $155 Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income 16 Depreciation deducted on tax return in excess of depreciation expense 32 Permanent differences (all related to operating income): Entertainment expenses (none are deductible under 2017 Tax Act) 8 Interest received on municipal bonds 3 Balance in deferred tax asset...
Information for Entity A for the year ended December 31, 2019 ($ in millions):    Income...
Information for Entity A for the year ended December 31, 2019 ($ in millions):    Income from continuing operations before tax $155 Temporary differences (all related to operating income): Accrued warranty expense in excess of expense included in operating income 16 Depreciation deducted on tax return in excess of depreciation expense 32 Permanent differences (all related to operating income): Entertainment expenses (none are deductible under 2017 Tax Act) 8 Interest received on municipal bonds 3 Balance in deferred tax asset...
For the year ended December 31, 2019, Waterway Electrical Repair Company reports the following summary payroll...
For the year ended December 31, 2019, Waterway Electrical Repair Company reports the following summary payroll data. Gross earnings: Administrative salaries $169,000 Electricians’ wages 461,000 Total $630,000 Deductions: FICA taxes $38,645 Federal income taxes withheld 165,000 State income taxes withheld (3%) 18,900 United Fund contributions payable 30,288 Health insurance premiums 18,200 Total $275,003 Waterway Company’s payroll taxes are Social Security tax 6.2%, Medicare tax 1.45%, state unemployment 2.5% (due to a stable employment record), and 0.8% federal unemployment. Gross earnings...
FV Company earned net income of $75,000 during the year ended December 31, 2012. On December...
FV Company earned net income of $75,000 during the year ended December 31, 2012. On December 15, FV declared the annual cash dividend on its 5% preferred stock (par value, $115,000) and a $0.50 per share cash dividend on its common stock (55,000 shares). FV then paid the dividends on January 4, 2013. 54 Requirements Journalize for FV: Declaring the cash dividends on December 15, 2012. Paying the cash dividends on January 4, 2013.
Comparative Earnings per Share Lucas Company reports net income of $5,125 for the year ended December...
Comparative Earnings per Share Lucas Company reports net income of $5,125 for the year ended December 31, 2016, its first year of operations. On January 4, 2016, Lucas issued 9,000 shares of common stock. On August 2, 2016, it issued an additional 3,000 shares of stock, resulting in 12,000 shares outstanding at year-end. During 2017, Lucas earned net income of $16,400. It issued 2,000 additional shares of stock on March 3, 2017, and declared and issued a 2-for-1 stock split...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT