Question

Describe impacts on the 3 financial statements (balance sheet, income statement and cash flow statement) of:

a. An increase of accounts receivables by $100

b. An increase of accrued expenses by $100

c. A decrease of prepaid expenses by $100
d. An increase in inventory by $100 (paid in cash)

e. An increase in depreciation by $100

f. A sale of equipment for $200 (value on the balance sheet: $170)

g. An asset write-down (impairment) of $100
h. A debt write-down (impairment) of $100
i. An issue of new shares for $500

j. An issue of new shares to employees as stock-based compensation for $500
k. A payment of dividends for $100
l. An expense of $50 of interest on a debt, 50% in cash and 50% in PIK (Paid-In-Kind I.e. accrued) interest

Remark: consider all above questions as independent of each other.

Answer 1