Vales Services Company loaned $6,000 on August 1, Year 1 to an individual who issued Vales a promissory note with 6% interest. The issuer of the note repaid the principal and interest on July 30, Year 2. How did the event on August 1 affect the statement of cash flows? How did the event on July 30 affect the statement of cash flows?
What will be an ideal response?
Vales would show a $6,000 outflow for investing activities on August 1, Year 1. The company would show a $6,000 inflow for investing activities and a $360 inflow for operating activities on July 30, Year 2.
Cash inflow for interest revenue = Principal of $6,000 × Annual interest rate of 6% × Time outstanding of 12/12 = $360
You might also like to view...
Describe the processes of mediation and arbitration and the major difference between the two.
What will be an ideal response?
You should ___________ sentences that begin with very large numbers
a. edit b. make a list with c. rewrite d. delete
Managers in business markets know that there is no benefit from adapting the concepts and practices of their counterparts in consumer markets to the business-to-business setting
Indicate whether the statement is true or false
Any contract involving a sale of goods of $100 or more must be in writing
a. True b. False Indicate whether the statement is true or false