Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt...

Explain how the accounts receivable, inventory, power and equipment, accounts payable, wages payable and long-term debt impacted cash flow from one year to the next.

200-word minimum.

Solutions

Expert Solution

Explanation of the Accounts receivable, Inventory, Power and Equipment, Accounts payable, Wages payable and Long term debt impacted cash flow from one year to the next.

Accounts Receivable and Inventory.

These are the current assets of the company and the company has the rights on above to realize. In cash flow, if the accounts receivable and Inventory will increase means have to make more credit sale and purchase inventory than it represents outflow of cash whereas if decrease than it represents an inflow of cash to the company means the company will realize or convert its stocks and receivable into cash.

Power and Equipments:

If more power and equipment are consumed in the company than the company has to purchase more and more that means outflow of cash from the company similarly low consumption results a saving for the company.

Accounts payable, Wages Payable.

These are the current liabilities of the company and the company has the obligation on above to repay it. In cash flow, if the accounts payable and wages payable will increase means have to make more payment to meet the obligations. then it represents an inflow of cash whereas if decrease than it represents an outflow of cash to the company means the company will repay its obligations.

Long Term Debts

It is the outside liabilities of the company which can be long term in nature. the company can raise debt in the form of the debenture, loans, Bonds from a bank, government and financial institute. when the company raise funds from others that would be considered as an inflow of cash and repayment of debt would be an outflow of cash. debt component bears interest and interest is an operating activity whereas repayment of debt is financing activities.

overally we can say that if there is an asset increase in the company that would result into outflow of the cash and if the assets are decreased than it may be inflow of cash into the company

Similarly, if Liabilities are decreases then cash will outflow and if liabilities increase then it would result into a saving of cash of the company

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

Assets Liabilities and Equity Cash $ 25,000 Accounts payable $ 25,000 Accounts receivable 156,000 Long-term debt...

Assets Liabilities and Equity Cash $ 25,000 Accounts payable $ 25,000 Accounts receivable 156,000 Long-term debt 103,000 Inventory 79,000 Common stock ($7 par; 21,000 3,000 shares outstanding) Plant and equipment 190,000 Additional paid-in capital 155,000 Retained earnings 146,000 $450,000 $450,000 Construct a new balance sheet showing the impact of a two-for-one split. If the current market price of the stock is $50, what is the price after the split? Round the par value and the market price after the split...

Cash $ 80 Accounts Payable $ 26 Accounts Receivable 12 Wages and Other Expenses Payable 111...

Cash $ 80 Accounts Payable $ 26 Accounts Receivable 12 Wages and Other Expenses Payable 111 Inventories 188 Long-Term Debt 203 Other Current Assets 26 Other Long-Term Liabilities 44 Property, Plant, and Equipment 355 Contributed Capital 356 Other Assets 99 Retained Earnings 20 Assume that the following events occurred in the quarter ended December 31 (amounts provided are in whole dollars): Paid $2,000,000 cash for an additional “other asset”. Issued additional shares for $2,000,000 in cash. Purchased property, plant, and...

Cash $ Current liabilities $ Accounts receivable $ Long-term debt $40,000 Inventories $ Common stock $ ...

Cash $ Current liabilities $ Accounts receivable $ Long-term debt $40,000 Inventories $ Common stock $ Fixed assets $ Retained earnings $60,000 Total assets $200,000 Total liabilities and equity $ Sales $ Cost of goods sold 1. Complete the balance sheet and sales information using the following financial data: Total assets turnover: 1.1x Days sales outstanding: 38 days Inventory turnover ratio: 4x Fixed assets turnover: 2.5x Current ratio: 2.5x Gross profit margin on sales: (Sales - Cost of goods sold)/Sales...

A company has Cash of $1000, Accounts Receivable of $200, Inventory of $300, Long-Term Assets of...

A company has Cash of $1000, Accounts Receivable of $200, Inventory of $300, Long-Term Assets of $4000, Accounts Payable of $500 and a Long-Term Bank Loan of $5000. Calculate the company's current ratio. Question 1 options: 1 2 3 4 Question 2 Using the following information, calculate the inventory turnover for ABC Retailers: Sales are $4800, Cost of Goods Sold is $2000, operating expenses are $1000, and average inventory is $500. Question 2 options: 4 5 6 7 Question 3...

accounts payable and accounts receivable

What is the difference between accounts payable and accounts receivable?

Cash $6,500 Accumulated Depreciation—Equipment $1,400 Accounts Receivable 3,800 Accounts Payable 2,900 Inventory 1,700 * Common Stock...

Cash $6,500 Accumulated Depreciation—Equipment $1,400 Accounts Receivable 3,800 Accounts Payable 2,900 Inventory 1,700 * Common Stock 22,000 Equipment 20,200 Retained Earnings 5,900 $32,200 $32,200 *(3,400 x $0.50) The following transactions occurred during December. Dec. 3 Purchased 4,500 units of inventory on account at a cost of $0.70 per unit. 5 Sold 4,900 units of inventory on account for $0.92 per unit. (Blue sold 3,400 of the $0.50 units and 1,500 of the $0.70.) 7 Granted the December 5 customer $276...

Current liabilities include: A. Accounts receivable B. Unearned revenues. C. Portion of long-term debt that will...

Current liabilities include: A. Accounts receivable B. Unearned revenues. C. Portion of long-term debt that will be paid with noncurrent assets D. All of these E. None of these.

A company has inventory balance of $24,318, accounts receivable of $9,637, and accounts payable of $14,365....

A company has inventory balance of $24,318, accounts receivable of $9,637, and accounts payable of $14,365. If the credit sales are $183,030 and cost of goods sold are $128,952, what is the company's cash (conversion) cycle in number of days? (Use ending balances and assume 365 days in a year.) A) 36.59 B) 37.61 C) 38.63 D) 39.64 E) 40.66

A company has inventory balance of $24,935, accounts receivable of $9,902, and accounts payable of $14,652....

A company has inventory balance of $24,935, accounts receivable of $9,902, and accounts payable of $14,652. If the credit sales are $186,978 and cost of goods sold are $132,477, what is the company's cash (conversion) cycle in number of days? (Use ending balances and assume 365 days in a year.)

BeachTime Company uses a perpetual inventory system and both an accounts receivable and an accounts payable...

BeachTime Company uses a perpetual inventory system and both an accounts receivable and an accounts payable subsidiary ledger. Balances related to both the general ledger and the subsidiary ledger for the company are indicated in the working papers. Below are a series of transactions for BeachTime Co. for the month of January. Credit sales terms are 2/10, n/30. The cost of all merchandise sold was 57% of the sales price. Jan.3 Sell merchandise on account to M. Knast $2,900, invoice...

Subjects