Assume a company had net income of $60,000 that included a gain on the sale of equipment of $4,000. Itprovided the following excerpts from its balance sheet:This Year Last YearCurrent assets:$ 40,000$ 53,000$ 13,000$ 46,000$ 50,000$ 11,000Accounts receivableInventoryPrepaid expensesCurrent liabilities:$ 38,000$ 18,000$ 13,000$ 44,000$ 15,000$ 10,000Accounts payableAccrued liabilitiesIncome taxes payableIf the credits to the company's accumulated depreciation account were $21,000, then based solely on theinformation provided, the company's net cash provided by (used in) operating activities would be: Assume a company is considering buying 10,000 units of a component part rather than making them. A supplierhas agreed to sell the company 10,000 units for a price of $40 per unit. The company's accounting system reportsthe following costs of making the part:Per10,000 UnitsUnitper YearDirect materials$ 18$ 180,000Direct labor12120,000Variable manufacturing overhead220,000Fixed manufacturing overhead, traceableFixed manufacturing overhead, allocated8.80,000440,000Total cost$ 44$ 440,000Three-fourth's of the traceable fixed manufacturing overhead relates to supervisory salaries and the remainderrelates to depreciation of equipment with no salvage value. If the company chooses to buy this component partfrom a supplier, then the supervisor who oversees its production would be discharged. What is the financialadvantage (disadvantage) of buying 10,000 units from the supplier?

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Assume a company had net income of $60,000 that included a gain on the sale of equipment of $4,000. It provided the following excerpts from its balance sheet: This Year Last Year Current assets: $ 40,000 $ 53,000 $ 13,000 $ 46,000 $ 50,000 $ 11,000 Accounts receivable Inventory Prepaid expenses Current liabilities: $ 38,000 $ 18,000 $ 13,000 $ 44,000 $ 15,000 $ 10,000 Accounts payable Accrued liabilities Income taxes payable If the credits to the company's accumulated depreciation account were $21,000, then based solely on the information provided, the company's net cash provided by (used in) operating activities would be:

Assume a company had net income of $60,000 that included a gain on the sale of equipment of $4,000. It provided the following excerpts from its balance sheet: This Year Last Year Current assets: $ 40,000 $ 53,000 $ 13,000 $ 46,000 $ 50,000 $ 11,000 Accounts receivable Inventory Prepaid expenses Current liabilities: $ 38,000 $ 18,000 $ 13,000 $ 44,000 $ 15,000 $ 10,000 Accounts payable Accrued liabilities Income taxes payable If the credits to the company's accumulated depreciation account were $21,000, then based solely on the information provided, the company's net cash provided by (used in) operating activities would be:

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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