Smithson is a small, privately-held company and therefore has no current requirement to issue financial statements using GAAP. The accountant has been utilizing a cash budgeting system in which a schedule of predicted cash sources and cash needs is
prepared at the end of each week for the following week. The company is considering whether a statement of cash flows would also be useful. Required: Explain the benefits that might be expected from a statement of cash flows and whether those are different from the benefits of a cash sources and cash needs listing.
A Statement of Cash Flows would provide historical information about the sources of the funds for operating, financing, and investing activities, as well as how the funds were used. It is a summary of the company's performance. The Cash Sources and Needs statement, on the other hand, is a prediction of the cash that the company will need and the source from which it will be obtained. One is a plan, the other reports results.
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Most companies consolidate the parent's and subsidiary's accounts summed
Indicate whether the statement is true or false
The Fabricating Department started the current month with a beginning Work in Process inventory of $10,000. During the month, it was assigned the following costs: direct materials, $76,000; direct labor, $24,000; and factory overhead, 50% of direct labor cost. Also, inventory with a cost of $109,000 was transferred out of the department to the next phase in the process. The ending balance of the Work in Process Inventory account for the Fabricating Department is:
A. $13,000. B. $165,000. C. $110,000. D. $56,000. E. $59,000.
If on-hand inventory = 100 units, scheduled receipts = 100 units and backorders = 100 units, the Inventory Position (IP) is the sum of the three, or 300 units
Indicate whether the statement is true or false
After a certain point, no further learning occurs, and each subsequent repetition or unit produced take the same amount of time, and the system has reached a steady state. This is illustrated by the ______ of the learning curve.
A. steep increase B. steep decrease C. flattening D. smoothing