Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Bob Test is the owner of a business that sells gardening equipment to homeowners, in 2022, Bob's Net Income After Taxes was $18,800 and he

image text in transcribed
image text in transcribed
Bob Test is the owner of a business that sells gardening equipment to homeowners, in 2022, Bob's Net Income After Taxes was $18,800 and he withdrew $29,900 from the business for living expenses. He had borrowed $15,000 from his father at the end of 2021 with the agreement to repay the loan by the end of 2023 and made no payments to his father in 2022 . He also used a credit card to purchase $6,000 in imventory in 2022 that is due in 2023 . The balance sheets for December 31, 2021 and December 31, 2022 are below. The only change in fued assets was due to depreciation. 1. Based on the balance sheets provided, please create a statement of cash flows. 2. Bob's principal payment on his long-term debt as well as his withdrawal for family llving expenses exceeds his net income after taxes, but he did make the principal payment on the loan. How did he make the payment (i.e. discuss his sources and uses of funds)? Discuss Bob's situation as he assesses his ability to make payments in 2023

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Principles Of Corporate Finance

Authors: Richard A Brealey, Stewart C Myers, Franklin Allen

8th Edition

0073130826, 9780073130828

More Books

Students also viewed these Accounting questions