OXia Company completes a local bank's loan application and applies for a six-month loan. 1. To evaluate whether Xia qualifies for the loan, the local bank will use the A) balance sheet to evaluate Xia Company's liquidity. B) balance sheet to evaluate Xia Company's return on assets. C) income statement to evaluate Xia Company's profitability. Dstatement of cash flows to evaluate Xia Company's solvency.
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- Direction: Lena established a talent agency. The following data are taken from the records of Lena Agency for the year 2019. Classify each cash flow activity (Operating, Investing, Financing or Non-cash).A. Talent Fees receivables from clientsB. Cash receipt from clientsC. Depreciation expenseD. Proceeds of Japan bank loanE. Cash purchase of buildingF. Provision for doubtful accountsG. Additional Investment of LenaH. Dividends income receivedI. Rent Income receivedJ. Payment of operating expensesK. Principal long-term loan paidL. Asset withdrawal of ownerM. Proceeds from sale of land1.Assume you are a credit manager in charge of approving commercial loans to business firms. Identify three aspects of a firm's cash flows you would review and explain the type of information you hope to gain from reviewing each of those five aspects.Entities are required to issue general purpose financial statements at least a. Once a month b. Once a year c. Twice a year d. Once a quarter This statement shows the entity's assets, liabilities, and equity of a particular date a. Statement of profit or loss and other comprehensive income b. Statement of financial position c. Statement of cash flows d. Notes to financial statements In the Statement of cash flows, the most important source of cash that serves as barometer about the health of business cash flows, come from a. Cash flows from investing activities b. Cash flows from operating activities c. Cash flows from investing activities d. Cash flows from borrowing activities
- Consider a bank with the following balance sheet (M means million): (Image Attached) Calculate the equity (total asset – total liability) to asset ratio of the bank (Hint: equity to asset ratio = total equity/total asset) and calculate the duration and convexity of the both asset and liability sides. Thank You in AdvanceIndicate the effect of the transactions listed in the following table on total current assets, current ration, and net income. Use (+) to indicate an increase, (-) to indicate a decrease, and (0) to indicate either no effect or an indeterminate effect. Be prepared to state any necessary assumptions and assume an initial current ratio of more than 1.0. Cash is obtained through short-term bank loans.Direction: Lena established a talent agency. The following data are taken from the records of Lena Agency for the year 2019. Classify each cash flow activity (Operating, Investing, Financing or Non-cash).D. Proceeds of Japan bank loanE. Cash purchase of buildingF. Provision for doubtful accountsG. Additional Investment of LenaH. Dividends income receivedI. Rent Income receivedJ. Payment of operating expensesK. Principal long-term loan paidL. Asset withdrawal of ownerM. Proceeds from sale of land
- Suppose your company sells services of $180 in exchange for $110 cash and $70 on account.Required:1. Show the journal entry to record this transaction.2. Identify the amount that should be reported as net cash flow from operating activities.3. Identify the amount that would be included in net income.4. Show how the indirect method would convert net income (requirement 3) to net cash flowfrom operating activities (requirement 2).5. What general rule about converting net income to operating cash flows is revealed by youranswer to requirement 4?The purchase of an office building by issuing long-term notes payable should be reported as a a. cash outflow in the financing section of the statement of cash flows. b. cash outflow in the investing section of the statement of cash flows. c. cash outflow in the operating section of the statement of cash flows. d. noncash investing and financing activity.Indicate whether each of the following statements is true or false. a) Loaning cash to another company is considered a financing activity on the statement of cash flows. The major difference between treating the extension of credit to a customer as accounts receivable and treating it as notes receivable b) is the existence of interest. c) In a promissory note, the payee issues the note to the maker. d) Interest rates are always stated on an annual basis, regardless of the length of the note. e) Accruing interest on a note receivable is considered an asset use transaction.
- 1. which of the following transactions will result in the increase and decrease in liability? a. payment of loan by installmentb. borrowed money from the bankc. issued a promissory note in payment of a liabilityd. request for an extension of the date of payment 2. a statement which shows where the money of the business is obtained and used? a. statement of financial positionb. statement of cash flowsc. cash budgetd. statement of revenues and expensesWhen a firm sells its accounts receivable to raiseshort-term cash, it is engaging in a strategycalleda. factoring.b. financial planning.c. equity financingd. debt financing.e. draftingThe list of assets, equity and liability to be filled. Assets Amount (RO) Land and Building Plant and Equipment Furniture and Fitting Inventories Accounts and other receivables Cash Bank 43,789 11,571 11,571 Interest Expenses Taxes 35,097 62,796 40,875 160,531 Equity & Liabilities Equity Share Capital Bonds Payable Accounts Payable Outstanding Expenses Short Term Bank Borrowing The list of Income Statement items is given below. Sales Cost of goods sold General and Administrative Expenses Selling and Marketing Expenses Depreciation Expenses Amount (RO) 165,588 87028 18,469 18,861 6,144 Amount (RO) 78,560 5,591 Additional Information: 1. Dividend paid by the company in the year 2022 is RO 30,277 2. The face value of each share is RO 0.196 3. The market price of shares at end 2022 is Ro 318,685,485.58 162,59 5 34,465 10,58 0 183,36 3 54578 You are required to calculate - Earnings per share, Interest cover, Dividend cover, Price/Earnings ratio, Gross Profit Margin Ratio, Operating profit…