"Cash Is King" for all businesses You can determine a company’s cash situation by analyzing its cash flow statement. The cash flow statement also helps determine whether the company (1) is generating enough cash from its operations to make new investments and pay dividends or (2) will need to generate cash by issuing new debt or selling its assets.

If a firm has a lot of net cash flow, does that mean the firm’s cash account (as reported on its balance sheet) must be high?

No

Yes

The statement of cash flows reports a company’s cash inflows and outflows for a given accounting period by categorizing the company’s sources (inflows) and uses (outflows) of cash as either operating, investing, or financing activities.

Determine whether the activities described in the following table should be categorized as operating, investing, or financing activities in the statement of cash flows.

Activity

OperatingActivity

InvestingActivity

FinancingActivity

D & W Company sells its last season’s inventory to a discount store.
A pharmaceutical company buys marketing rights to sell a drug exclusively in East Asian markets.
HappySnacks Inc. uses cash to repurchase 10% of its common shares.
A company records a decrease in its total raw materials inventory from the previous year.
Blue Hamster Manufacturing Inc. reported net sales of $5,500,000 last year and generated a net income of $1,375,000. Last year’s accounts receivable increased by $230,000. What is the maximum amount of cash that Blue Hamster received from sales last year?

$3,952,500

$5,270,000

$2,635,000

$1,605,000

The market price of cheeseburgers in a college town increased recently, and the students in an economics class are debating the cause of the price increase. some students suggest that the price increased because the price of beef, an important ingredient for making cheeseburgers, has increased. other students attribute the increase in the price of cheeseburgers to a recent increase in college student enrollment.1. the first group of students thinks the increase in the price of cheeseburgers is due to the fact that the price of beef, an important ingredient for making cheeseburgers, has increased. (what happened to demand and supply, shift to the right or left)2. the second group of students attributes the increase in the price of cheeseburgers to the increase in college student enrollment. (what happens to demand and supply, shift to the right or left)3. suppose that both of the events you analyzed above are partly responsible for the increase in the price of cheeseburgers. based on your analysis of the explanations offered by the two groups of students, how would you figure out which of the possible causes was the dominant cause of the increase in the price of cheeseburgers? (choose a, b,c, or d)a)if the price increase was small, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.b)if the equilibrium quantity of cheeseburgers decreases, then the demand shift in the market for cheeseburgers must have been larger than the supply shift.c)if the equilibrium quantity of cheeseburgers decreases, then the supply shift in the market for cheeseburgers must have been larger than the demand shift.d)whichever change occurred first must have been the primary cause of the change in the price of cheeseburgers.

Which of the following is not an example of one of the four mail advantages of prices on a free market economy

On january 15, the end of the first biweekly pay period of the year, north company’s payroll register showed that its employees earned $32,000 of sales salaries. withholdings from the employees’ salaries include fica social security taxes at the rate of 6.2%, fica medicare taxes at the rate of 1.45%, $3,000 of federal income taxes, $772 of medical insurance deductions, and $260 of union dues. no employee earned > $7,000 in this first period. prepare the journal entry to record north company’s january 15 (employee) payroll expenses and liabilities.