A company issues $1.1 million of new stock and pays $201,000 in cashdividends during the year. In addition, the company took advantage offalling interest rates to borrow $1.51 million in a new bond issue and paidoff existing bonds with a face value of $2.05 million. The company bought501 of another company's $1,010 bonds at a $101,000 premium. The netcash flow provided by financing activities is:A) An outflow of $201,000.B) An inflow of $359,000.C) An inflow of $540,000.D) An outflow of $101,000G

Financing activities involve obtaining or repaying funds to support the operation of the company,…

Answered: A company issues $1.1 million of new…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Intella's current assets total to $20 million versus $10 million of current liabilities, while AWD's current assets are $10 million versus $20 million of current liabilities. Both firms would like to "window dress" their end-of-year financial statements, and to do so they tentatively plan to borrow $10 million on a short-term basis and to then hold the borrowed funds in their cash accounts. Which of the statements below best describes the results of these transactions? OA. The transactions would improve Intella's financial strength as measured by its current ratio but lower AWD's current ratio. O B. The transactions would lower Intella's financial strength as measured by its current ratio but raise AWD's current ratio. O C. The transactions would have no effect on the firm' financial strength as measured by their current ratios. O D. The transactions would lower both firm' financial strength as measured by their current ratios. O E. The transactions would improve both firms' financial…
A company issues $1.1 million of new stock and pays $201,000 in cash dividends during the year. In addition, the company took advantage of falling interest rates to borrow $1.51 million in a new bond issue and paid off existing bonds with a face value of $2.05 million. The company bought 501 of another company's $1,010 bonds at a $101,000 premium. The net cash flow provided by financing activities is: A) An outflow of $201,000. B) An inflow of $359,000. C) An inflow of $540,000. D) An outflow of $101,000
During the current year, Royal Industries sold treasury stock for $32,000 cash. The treasury stock was purchased last year for $28,000. The company also issued bonds payable for $430,000 cash and declared and paid dividends of $40,000. What amount did Royal report on its statement of cash flows for cash provided by financing activities? O $390,000 O $394,000 O $422,000 O $434,000
Company DotThrive reported the following financial results. Operating income is $94.98 million and depreciation and amortization is $6.12 million. The company spent $13.99 million buying new equipment and sold $3.58 million old equipment (this is the after-tax salvage). Net working capital increased by $1.31 million from previous year. The company's tax bracket is 21%. What's the company's Free Cash Flow (FCF) for the year?
The following data relates to a bank, Tolland Union. The bank earned $3.530B of in interest revenue and paid $2.471B in interest expense last year. During the year, write offs and reserves for bad loans was a charge of $75M. This was partially offset by fees and points earned from loans and loan origination, increasing income of $24M. During that year, the bank generated net earnings of $860M. The bank has $24.9B of interest earning assets, AND total assets of $31.5B. The shareholders’ equity is $5.9B. What is the bank’s return on assets (ROA)?
At the beginning of the current year, a company issued stock for $150,000 and borrowed $80,000 from the bank. By the end of the year, the company had provided services of $83,000 for cash, paid employee salaries of $39,000, and paid utilities of $13,000. Determine the amount of financing cash flows the company will report in the current year. (Cash outflows should be indicated with a minus sign.) Financing cash flows
Renaldo Cross Company paid $2,000 interest on short-term notes payable, $10,000 principal of long-term bonds, and $6,000 in dividends on its common stock. Renaldo Cross Company would report cash outflows from activities, as follows: Multiple Choice Operating, $0; investing, $10,000; financing, $8,000. Operating, $0; investing, $0; financing, $18,000. Operating, $2,000; investing, $10,000; financing, $6,000. Operating, $2,000; investing, $0; financing, $16,000. 身

Café Creations Incorporated has net cash flow from financing activities for the last year of $25 million. The company paid $15 million in dividends last year. During the year, the change in notes payable on the balance sheet was a decrease of $40 million, and change in common and preferred stock was an increase of $50 million. The end of year balance for long-term debt was $40 million. What was their beginning of year balance for long-term debt? Multiple Choice $20 million $30 million $40 million $10 million
Binomial Tree Farm's financing includes $5 million of bank loans. Its common equity is shown in Binomial's Annual Report at $6.67 million. It has 500,000 shares of common stock outstanding, which trade on the Wichita Stock Exchange at $18 per share. What debt ratio should Binomial use to calculate its company cost of capital or asset beta? Note: Enter your answer as a percent rounded to 2 decimal places. Debt ratio %
Trident Corporation had the following cash flows in the current year. Which of the following will be categorized under the financing activities section of the statement of cash flows? O Purchase of $125,000 worth of five-year bonds issued by Towson Utilities O Rent on a warehouse amounting to $1.1 million O Lease income received on a piece of land O Preferred dividends of $330,000 paid to shareholders

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