Advanced Accounting
Advanced Accounting
12th Edition
ISBN: 9781305084858
Author: Paul M. Fischer, William J. Tayler, Rita H. Cheng
Publisher: Cengage Learning
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Chapter 6, Problem 2UTI
To determine

Cash flow:

Cash flow is the receipt or payment by the organization. It may be related to the current period or any other period. It shows the cash position of the organization.

Cash flow from operating activities:

Cash flow from the operating activities shows the receipt and payment regarding the business activity only.

Cash flow from investing activities:

Cash flow from the investing activities shows the receipt and payment regarding the investment activity only.

Cash flow from financing activities:

Cash flow from the financing activities shows the receipt and payment regarding the financing activity only.

Cash flow statement:

Cash flow statement is a statement that reports the cash inflow or outflow in the operating, investing, and financing activities of a company for a particular period. This statement represents the sources and applications or uses of cash. Statement of cash flows tells about the liquidity position of the company. It tells about the amount of cash available to meet the obligations of the company.

:

To identify: the effect of the given acquisition on the cash flow statements prepared after the year of purchase.

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Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and Table 2.) Date Placed in Asset Machinery Service October 25 Original Basis $ 120,000 Computer equipment February 3 47,500 Used delivery truck* August 17 Furniture April 22 60,500 212,500 The delivery truck is not a luxury automobile. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. b. What is the allowable depreciation on Evergreen's property in the current year if Evergreen does not elect out of bonus depreciation and elects out of §179 expense?
Lina purchased a new car for use in her business during 2024. The auto was the only business asset she purchased during the year, and her business was extremely profitable. Calculate her maximum depreciation deductions (including §179 expense unless stated otherwise) for the automobile in 2024 and 2025 (Lina doesn't want to take bonus depreciation for 2024) in the following alternative scenarios (assuming half-year convention for all): (Use MACRS Table 1, Table 2, and Exhibit 10-10.) a. The vehicle cost $40,000, and business use is 100 percent (ignore §179 expense). Year Depreciation deduction 2024 2025
Evergreen Corporation (calendar-year-end) acquired the following assets during the current year: (Use MACRS Table 1 and Table 2.) Date Placed in Asset Machinery Service October 25 Original Basis $ 120,000 Computer equipment February 3 47,500 Used delivery truck* August 17 Furniture April 22 60,500 212,500 The delivery truck is not a luxury automobile. Note: Do not round intermediate calculations. Round your answers to the nearest whole dollar amount. a. What is the allowable depreciation on Evergreen's property in the current year, assuming Evergreen does not elect §179 expense and elects out of bonus depreciation?
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