Effects of all cash flows affect the balances of various accounts reported in the balance sheet . Also, the activities that cause some of these cash flows are reported in the income statement. What, then, is the need for an additional financial statement that reports cash flows?

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Answer 1

Textbook Question

Chapter 21, Problem 21.1Q

Effects of all cash flows affect the balances of various accounts reported in the balance sheet. Also, the activities that cause some of these cash flows are reported in the income statement. What, then, is the need for an additional financial statement that reports cash flows?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

To Explain: The need for an additional financial statement that reports the cash flows.

Explanation of Solution

The cash flow statement reports the actual cash inflow and outflow, which occurred during the accounting period. Though the cash flow affects the balances of the various accounts represented in the income statement and the balance sheet, the original cash transaction is not clear. This is accrual principle as the prepaid expenses, outstanding expenses, accrued income are all not shown by them.

Thus, preparing the cash flow statement gives a clear overview of all the expenses made and the cash received in the accounting period.

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KIARA LIMITED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER: ASSETS Property, plant and equipment (cost) Accumulated depreciation Long-term investments Inventory Accounts receivable Company tax paid in advance Bank EQUITY AND LIABILITIES 2024 2023 R R 2 490 000 1 620 000 (630 000) 660 000 1 050 000 1 230 000 30 000 (480 000) 450 000 1 290 000 900 000 0 750 000 660 000 5 580 000 4 440 000 Ordinary share capital 2 700 000 2 000 000 Retained income 1 500 000 1 158 000 Long-term loan from Kip Bank (15%) 900 000 1 000 000 Accounts payable 480 000 228 000 Company tax payable 0 54 000 5 580 000 4 440 000 ADDITIONAL INFORMATION All purchases and sales are on credit. Interim dividends paid during the year amounted to R150 750. Credit terms of 3/10 net 60 days are granted by creditors.

Accounting Question

REQUIRED Study the information given below and answer the following questions. Where discount factors are required use only the four decimals present value tables that appear after the formula sheet or in the module guide. Ignore taxes. 5.1 Calculate the Accounting Rate of Return on average investment of the second alternative (expressed to two decimal places). 5.2 Determine which of the two investment opportunities the company should choose by calculating the Net Present Value of each alternative. Your answer must include the calculation of the present values and NPV. 5.3 Calculate the Internal Rate of Return of the first alterative (expressed to two decimal places). Your answer must include two net present value calculations (using consecutive rates/percentages) and interpolation. INFORMATION The management of Bentall Incorporated is considering two investment opportunities: (5 marks) (9 marks) (6 marks) The first alternative involves the purchase of a new machine for R900 000 which…

Answer 2

Textbook Question

Chapter 21, Problem 21.1Q

Effects of all cash flows affect the balances of various accounts reported in the balance sheet. Also, the activities that cause some of these cash flows are reported in the income statement. What, then, is the need for an additional financial statement that reports cash flows?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

To Explain: The need for an additional financial statement that reports the cash flows.

Explanation of Solution

The cash flow statement reports the actual cash inflow and outflow, which occurred during the accounting period. Though the cash flow affects the balances of the various accounts represented in the income statement and the balance sheet, the original cash transaction is not clear. This is accrual principle as the prepaid expenses, outstanding expenses, accrued income are all not shown by them.

Thus, preparing the cash flow statement gives a clear overview of all the expenses made and the cash received in the accounting period.

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Answer 3

Textbook Question

Chapter 21, Problem 21.1Q

Effects of all cash flows affect the balances of various accounts reported in the balance sheet. Also, the activities that cause some of these cash flows are reported in the income statement. What, then, is the need for an additional financial statement that reports cash flows?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

To Explain: The need for an additional financial statement that reports the cash flows.

Explanation of Solution

The cash flow statement reports the actual cash inflow and outflow, which occurred during the accounting period. Though the cash flow affects the balances of the various accounts represented in the income statement and the balance sheet, the original cash transaction is not clear. This is accrual principle as the prepaid expenses, outstanding expenses, accrued income are all not shown by them.

Thus, preparing the cash flow statement gives a clear overview of all the expenses made and the cash received in the accounting period.

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Answer 4

Textbook Question

Chapter 21, Problem 21.1Q

Effects of all cash flows affect the balances of various accounts reported in the balance sheet. Also, the activities that cause some of these cash flows are reported in the income statement. What, then, is the need for an additional financial statement that reports cash flows?

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Expert Solution & Answer

To determine

Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

To Explain: The need for an additional financial statement that reports the cash flows.

Explanation of Solution

The cash flow statement reports the actual cash inflow and outflow, which occurred during the accounting period. Though the cash flow affects the balances of the various accounts represented in the income statement and the balance sheet, the original cash transaction is not clear. This is accrual principle as the prepaid expenses, outstanding expenses, accrued income are all not shown by them.

Thus, preparing the cash flow statement gives a clear overview of all the expenses made and the cash received in the accounting period.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

To Explain: The need for an additional financial statement that reports the cash flows.

Explanation of Solution

The cash flow statement reports the actual cash inflow and outflow, which occurred during the accounting period. Though the cash flow affects the balances of the various accounts represented in the income statement and the balance sheet, the original cash transaction is not clear. This is accrual principle as the prepaid expenses, outstanding expenses, accrued income are all not shown by them.

Thus, preparing the cash flow statement gives a clear overview of all the expenses made and the cash received in the accounting period.

Answer 8

Expert Solution & Answer

To determine

Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

To Explain: The need for an additional financial statement that reports the cash flows.

Explanation of Solution

The cash flow statement reports the actual cash inflow and outflow, which occurred during the accounting period. Though the cash flow affects the balances of the various accounts represented in the income statement and the balance sheet, the original cash transaction is not clear. This is accrual principle as the prepaid expenses, outstanding expenses, accrued income are all not shown by them.

Thus, preparing the cash flow statement gives a clear overview of all the expenses made and the cash received in the accounting period.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Financial statement: Financial statements are condensed summary of transactions communicated in the form of reports for the purpose of decision making. The financial statements reports, and shows the financial status of the business. The financial statements consist of the balance sheet, income statement, statement of retained earnings, and the cash flow statement.

Statement of cash flows: This statement reports all the cash transactions which are responsible for inflow and outflow of cash and result of these transactions is reported as ending balance of cash at the end of reported period.

To Explain: The need for an additional financial statement that reports the cash flows.

Answer 12

Explanation of Solution

The cash flow statement reports the actual cash inflow and outflow, which occurred during the accounting period. Though the cash flow affects the balances of the various accounts represented in the income statement and the balance sheet, the original cash transaction is not clear. This is accrual principle as the prepaid expenses, outstanding expenses, accrued income are all not shown by them.

Thus, preparing the cash flow statement gives a clear overview of all the expenses made and the cash received in the accounting period.

Answer 13

Ch. 21 - Effects of all cash flows affect the balances of...Ch. 21 - Prob. 21.2Q Ch. 21 - Prob. 21.3Q Ch. 21 - Prob. 21.4Q Ch. 21 - Prob. 21.5Q Ch. 21 - Prob. 21.6Q Ch. 21 - Prob. 21.7Q Ch. 21 - The sale of stock and the sale of bonds are...Ch. 21 - Does the statement of cash flows report only...Ch. 21 - Prob. 21.10Q

Effects of all cash flows affect the balances of various accounts reported in the balance sheet . Also, the activities that cause some of these cash flows are reported in the income statement. What, then, is the need for an additional financial statement that reports cash flows?

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