Chuxplayspiano
New member
Ive been stuck on this problem for a while now. If you guys could help it would be great.
Based on the information given for ghoulish noise, the company should report net cash flow from operations for October, 2006 of
A) 119,000
B) 59,000
C) 74,000
D) 134,000
e) none of the above
Use the following information for Questions 8 - 20:
Ghoulish Noise provides the sound effects for Halloween events. Ghoulish Noise commenced operations on October 1, 2005. Information about Ghoulish Noise's balance sheet accounts at September 30, 2006 is summarized as follows:
Balance Sheet information at September 30, 2006
Cash$1,000
Accounts receivable, net of $5,000 Allowance for Uncollectible Accounts (Bad Debts)
$49,000
Prepaid Insurance
•for three month policy with coverage effective September 1 – November 30$1,000
Computer and Sound Equipment, cost
•acquired on October 1, 2005$36,000
Accumulated Amortization – computer and sound equipment$12,000
Total Assets$75,000
Advances from Customers for October 2006 events$20,000
Note Payable less Discount
•Ghoulish Noise issued this note to acquire the Computer and sound equipment – the Note, a promise to pay $43,560 on September 30, 2007, was issued on October 1, 2005 to acquire the Computer and Sound Equipment. $39,600
Share Capital
•Sam Scream acquired all the 5,000 common shares of Ghoulish Noise when the corporation was formed October 1, 2005$10,000
Retained Earnings$5,400
Total Liabilities and Shareholder’s Equity
$75,000
Cash Receipts for October 2006 were as follows:
Cash collected from customers for events held before October 1, 2006$48,000
Cash collected for October, 2006 performances$80,000
Cash received in advance for an October, 2007 performance$15,000
Cash Disbursements for October 2006 were as follows:
Cash paid for music rights for music used at October events$2,000
Transportation charges paid$4,000
Wages paid$3,000
Dividends declared and paid$60,000
Other Information:
•Ghoulish Noise billed customers $93,000 for October performance: $113,000 for the work done, less $20,000 received in advance.
•Transportation costs of $3,000 are still owed at October 31, 2006
•Wages of $2,500 are still owed to employees at October 31, 2006
•One account receivable for $1,500 was written-off in October
•Cheque #103 paying transportation costs of $4,000 did not clear the bank until November. All other cheques issued and deposits made cleared in October.
•Present value tables are attached at the end of this exam.
The answer for this question is d in the solutions, but it doesn't explain why. I tried numerous times but i never have gotten the answer d. Thanks.
Based on the information given for ghoulish noise, the company should report net cash flow from operations for October, 2006 of
A) 119,000
B) 59,000
C) 74,000
D) 134,000
e) none of the above
Use the following information for Questions 8 - 20:
Ghoulish Noise provides the sound effects for Halloween events. Ghoulish Noise commenced operations on October 1, 2005. Information about Ghoulish Noise's balance sheet accounts at September 30, 2006 is summarized as follows:
Balance Sheet information at September 30, 2006
Cash$1,000
Accounts receivable, net of $5,000 Allowance for Uncollectible Accounts (Bad Debts)
$49,000
Prepaid Insurance
•for three month policy with coverage effective September 1 – November 30$1,000
Computer and Sound Equipment, cost
•acquired on October 1, 2005$36,000
Accumulated Amortization – computer and sound equipment$12,000
Total Assets$75,000
Advances from Customers for October 2006 events$20,000
Note Payable less Discount
•Ghoulish Noise issued this note to acquire the Computer and sound equipment – the Note, a promise to pay $43,560 on September 30, 2007, was issued on October 1, 2005 to acquire the Computer and Sound Equipment. $39,600
Share Capital
•Sam Scream acquired all the 5,000 common shares of Ghoulish Noise when the corporation was formed October 1, 2005$10,000
Retained Earnings$5,400
Total Liabilities and Shareholder’s Equity
$75,000
Cash Receipts for October 2006 were as follows:
Cash collected from customers for events held before October 1, 2006$48,000
Cash collected for October, 2006 performances$80,000
Cash received in advance for an October, 2007 performance$15,000
Cash Disbursements for October 2006 were as follows:
Cash paid for music rights for music used at October events$2,000
Transportation charges paid$4,000
Wages paid$3,000
Dividends declared and paid$60,000
Other Information:
•Ghoulish Noise billed customers $93,000 for October performance: $113,000 for the work done, less $20,000 received in advance.
•Transportation costs of $3,000 are still owed at October 31, 2006
•Wages of $2,500 are still owed to employees at October 31, 2006
•One account receivable for $1,500 was written-off in October
•Cheque #103 paying transportation costs of $4,000 did not clear the bank until November. All other cheques issued and deposits made cleared in October.
•Present value tables are attached at the end of this exam.
The answer for this question is d in the solutions, but it doesn't explain why. I tried numerous times but i never have gotten the answer d. Thanks.