Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Case Link Question (1) Directions: Click the Worksheet Link above and use the Quick Cash Flow Worksheet to answer this question: Business Bs net profit

image text in transcribed
image text in transcribed
Case Link Question (1) Directions: Click the Worksheet Link above and use the Quick Cash Flow Worksheet to answer this question: Business Bs net profit is $12,923, depreciation is $24,286, and its working investment (the total of accounts receivable and inventory, less accounts payable and accrued expenses) increased $9,782. It purchased fixed assets of $10,100, paid their owners $5,000 in dividends, and had no long-term debt. Using the Quick Cash Flow method, what amount of cash is available for all debt repayment? O$3,519 O$12,327 O $22,327 O$31,891 Quick Cash Flow (in $000s) Company Name (U) S GFA (U) S Net profit Plus: Depreciation, amortization expense Plus (or less): A Working investment Equals: Cash after operating cycle Plus (or less): A Gross fixed assets Equals: Cash after capital investment cycle Less: Dividends declared Equals: Cash available for all debt repayment Less: Current portion long-term debt (prior year) Equals: Cash available for other debt repayment Change in working investment Accounts receivable (net) Plus: Inventory BEGINNING ENDING Less: Accounts payable Less: Accrued expenses Equals: Working investment Beginning working investment Less: Ending working investment Equals: A Working investment Change in working investment Accounts receivable (net) Plus: Inventory Less: Accounts payable Less: Accrued expenses Equals: Working investment BEGINNING ENDING Beginning working investment Less: Ending working investment Equals: A Working investment Change in working investment Accounts receivable (net) BEGINNING ENDING Plus: Inventory Less: Accounts payable Less: Accrued expenses Equals: Working investment Beginning working investment Less: Ending working investment Equals: A Working investment Are any changes in income taxes payable, interest payable, prepaid expenses, investments, or miscellaneous other accounts large enough to distort quick cash flow

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

Auditors Guide To Information Systems Auditing

Authors: Richard E. Cascarino

1st Edition

0470009896, 978-0470009895

More Books

Students also viewed these Accounting questions