You are provided with the following transactions that took place during a recent fiscal year

P12-1A You are provided with the following transactions that took place during a recent fiscal year.

Transaction Where Reported on Statement Cash Inflow, Outflow, or No Effect?
a. Recorded depreciation expense on the plant assets.
b. Recorded and paid interest expense.
c. Recorded cash proceeds from a sale of plant assets.
d. Acquired land by issuing common stock.
e. Paid a cash dividend to preferred stockholders.
f. Distributed a stock dividend to common stockholders.
g. Recorded cash sales.
h. Recorded sales on account.
i. Purchased inventory for cash.
j. Purchased inventory on account.

Distinguish among operating, investing, and financing activities.

Instructions
Complete the table, indicating whether each item (1) should be reported as an operating (O) activity, investing (I) activity, financing (F) activity, or as a noncash (NC) transaction reported in a separate schedule, and (2) represents a cash inflow or cash outflow or has no cash flow effect. Assume use of the indirect approach.

Click here for the solution: You are provided with the following transactions that took place during a recent fiscal year

You are provided with the following transactions that took place during the year

P12-12A You are provided with the following transactions that took place during the year.

Transactions Free Cash Flow ($125,000) Current Cash Debt Coverage Ratio (0.5 times) Cash Debt Coverage Ratio (0.3 times)

a. Recorded credit sales $2,500.
b. Collected $1,900 owed by customers.
c. Paid amount owed to suppliers $2,750.
d. Recorded sales returns of $500 and credited the customer’s account.
e. Purchased new equipment $5,000; signed a long-term note payable for the cost of the equipment.
f. Purchased a patent and paid $65,000 cash for the asset.

Instructions
For each transaction listed above, indicate whether it will increase (I), decrease (D), or have no effect (NE) on the ratios.

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(Cash Discounts) You place an order for 350 units of inventory at a unit price of $140

(Cash Discounts) You place an order for 350 units of inventory at a unit price of $140. The supplier offers terms of 1/10, net 30.

a) How long do you have to pay before the account is overdue? If you take the full period, how much should you remit?

b) What is the discount being offered? How quickly must you pay to get het discount? If you do take the discount how much should you remit?

c) If you don’t take the discount, how much interest are you paying implicitly? How many days’ credit are you receiving?

Click here for the solution: (Cash Discounts) You place an order for 350 units of inventory at a unit price of $140