Posts by: Elvina J
Re: Prepaid Rent & Selling of Assets
I don't understand the explanation on the impact on the cashflow statement, seems to be missing some things on the impact on the cashflow statement. Let me see if I get this right, assuming tax is 40%, here are the impacts on the 3 financial statements: P&L Add: gain from asset sale +$1.5k Le... Read More
I don't understand the explanation on the impact on the cashflow statement, seems to be missing some things on the impact on the cashflow statement. Let me see if I get this right, assuming tax is 40%, here are the impacts on the 3 financial statements: P&L Add: gain from asset sale +$1.5k Le... Read More
Projection of FX translation
I see that this was not projected, but if you were to project this, how would you do that & where is the impact on the 3 financial statements?
I see that this was not projected, but if you were to project this, how would you do that & where is the impact on the 3 financial statements?
This is a follow up question from the prior question below on sale of asset. I was not able to reply to that thread so I am starting a new question instead. Question was: I am looking at the Morgan Supplies Company example and wondering how you would know to expense the 28? 2. if you purchased a mac... This is a follow up question from the prior question below on sale of asset. I was not able to reply to that thread so I am starting a new question instead. Question was: I am looking at the Morgan Supplies Company example and wondering how you would know to expense the 28? 2. if you purchased a machine for $34,000 in cash during 2013 and after depreciation the book value in 2014 is 8,500. if you want to sell the machine and report a gain of $1500 on the IS (selling price= $10,000)-- how would you do this? for the BS would PPE be written down like (8500) and then a gain as cash and and revenue under SE? On the IS would the gain of $1500 be recorded under Other Income or under revenue?
My response: I don't understand the explanation on the impact on the cashflow statement, seems to be missing some things on the impact on the cashflow statement. Let me see if I get this right, assuming tax is 40%, here are the impacts on the 3 financial statements: (1) P&L: Add: gain from asset sale +$1.5k, Less: tax effect: -600, Impact on net income: +900. (2) Cashflow statement: (a) CFO: impact from net income: +900, less: gain in asset sale: -1.5k, change in CFO: -600, (b) CFI: Add: proceeds from sale of asset: +10k, change in CFI: +10k, (c) CFF: no change, (d) net change in cash: -600 + 10k = +9.4k. (3) Balance sheet: (a) Asset side: Cash: +9.4k Net PPE: -8.5k, Asset change: +900, (b) Liability side: no change, (c) Equity side: Retained earnings: +900, (d) hence both sides A and L+E are balanced where each side is +900. is this correct? Read More