Your company received a $7 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $2 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $5 million within 40 days. Suppose your firm’s tax rate is 0% (ignore taxes). Based on this information, complete the table below: Account Account Increase/Decrease/ No effect Value of effect ($) Revenues Earnings Receivables Inventory Cash
Your company received a $7 million order on the last day of the year. You filled the order with $3 million worth of inventory. The customer picks up the order the same day and pays $2 million up front in cash; you also issue a bill for the customer to pay the remaining balance of $5 million within 40 days. Suppose your firm’s tax rate is 0% (ignore taxes). Based on this information, complete the table below: Account Account Increase/Decrease/ No effect Value of effect ($) Revenues Earnings Receivables Inventory Cash
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Your company received a $7 million order on the last day of the year.
You filled the order with $3 million worth of inventory. The customer
picks up the order the same day and pays $2 million up front in cash;
you also issue a bill for the customer to pay the remaining balance
of $5 million within 40 days. Suppose your firm’s tax rate is 0%
(ignore taxes). Based on this information, complete the table below:
| Account | Account Increase/Decrease/ No effect | Value of effect ($) |
| Revenues | ||
| Earnings | ||
| Receivables | ||
| Inventory | ||
| Cash |
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