Chapter 01 Financial Statements and Business Decisions True / False Questions 1. Accounting is a system that collects and processes financial information about an organization and reports that information to decision makers. True False 2. Assets on the balance sheet are recorded at market value or replacement cost. True False 3. In accounting and reporting for a business entity, the accounting and reporting for the business must be kept separate from other
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equal to the present value of the future cash flows that it will generate o Where Value0 = Value of equity at time 0 Cash Dividendt = expected amount of cash dividends to be paid in period t r = discount rate (cost of capital) Chapter 1 Equity Valuation and Analysis Page 1 of 5 o Modified Model o Where all from except Stock Repurchasest = expected amount of cash to be paid in period t Equity Issuancest = expected amount of cash to be raised via equity issuances in period
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28th 2003 and June 2002 cash flow statement shows the breakdown of the company inflow and out flow for the 3 years. The operating activities show the net income and net loss for the 3 years. The investing shows the purchases made in 2002, 2003 and 2004. Lastly the activity of the financing for the company shows the increase and decrease of the long-term commitments in the company. In 2002 the Candela Corporation had a cash flow from operations of 7,071,000. The cash flow shows that being greater
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Chapter 12 1(a) Tagline Statement of Cash Flows For the year ended 31 December x5 | RM’000 | | RM’000 | Cash from operating activities: | | | | Profit before taxation | | | 50 | Adjustments fro: | | | | Depreciation | | | 2,200 | Profit on disposal of PPE (12,000-7,400) | | | (4,600) | Release of government grant | | | (250) |
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09 Prospective Analysis Multiple Choice Questions 1. When preparing a projected income statement, which of the following additional information, other then the financial statements would probably not be relevant? A. The competitive environment B. New versus old store mix C. Expected capital expenditure D. Expected level of macroeconomic activity 2. The reliability of a short-term cash forecast depends most heavily on the quality of: A. Cost of goods sold forecast B. Current
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The Four Basic Financial Statements Marta Karina Briones ACC / 290 July 25, 2013 Professor Louann Schloss The Four Basic Financial Statements There are four basic financial statements in accounting, which are as follow: a balance sheet, an income statement, a retained earnings statements, and an income of cash flows. Each of these statements has their individual purpose in the field of accounting. According to Kimmel (2011),”…the four financial statements form the backbone of financial
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for cash. (b) Purchased a machine for $30,000, giving a long-term note in exchange. (c) Issued $200,000 par value common stock upon conversion of bonds having a face value of $200,000. (d) Declared and paid a cash dividend of $18,000. (e) Sold a long-term investment with a cost of $15,000 for $15,000 cash. (f) Collected $16,000 of accounts receivable. (g) Paid $18,000 on accounts payable. Instructions Analyze the transactions and indicate whether each transaction resulted in a cash flow
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Depreciation: A portion of the costs of fixed assets charged against annual revenues over time. The net effect is that depreciation deductions increase a firm’s cash flow because they reduce a firm’s tax bill. Depreciation for tax purposes is determined by using the modified accelerated cost recovery system (MACRS), a system used to determine the depreciation of assets for tax purposes. The time period over which an asset is depreciated is called its depreciable life. The shorter the depreciable
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Cash Flow All companies are required to prepare a cash flow statement since it provides the necessary information that other users require. External and internal users depend on the cash flow statement to determine their paths they have decided on. Lenders and investors look at the cash flow statement to see the company’s generated income, abilities to pay loans, and growth outcome predictions. The cash flow statement contains items such as depreciation that is also on the income statement, but
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investors. There are three major statements, the Income Statement, the Balance Sheet, and the Statement of Cash Flows. When deciding how a company is fairing there are many aspects to look at within each sheet. Income Statement: An income statement is a summary of two key categories of cash flow. It reflects the total revenue generated during a specific time period, and the total expenses that were sustained during that same period. The preparation of income statements on a steady basis allows a business
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