1. In accounting, we usually use historical cost (i.e. original price) on the balance sheet. However, for some debt/equity investments, we adjust to fair market value. Explain to me why some debt/equity investments get adjusted to fair market value while other investments do not. 2. Your Statement of Cash Flows shows a negative cash flow from investing activities (primarily from a significant investment in equipment this year) and a positive cash flow from financing activities (primarily due to both issuing new common stock and taking out a note payable to fund your equipment purchase). Your CEO has asked you to give one potential positive and one potential negative explanation for the investing and financing cash flows. You should have 4 statements total (Investing - 1 positive explanation, 1 negative explanation; Financing - 1 positive, 1 negative). E.g. "The negative cash flow from investing could be a positive thing because the equipment we bought has a Buffalo Bills logo, which will bring in more customers!"

1. In accounting, we usually use historical cost (i.e. original price) on the balance sheet. However, for some debt/equity investments, we adjust to fair market value. Explain to me why some debt/equity investments get adjusted to fair market value while other investments do not. 2. Your Statement of Cash Flows shows a negative cash flow from investing activities (primarily from a significant investment in equipment this year) and a positive cash flow from financing activities (primarily due to both issuing new common stock and taking out a note payable to fund your equipment purchase). Your CEO has asked you to give one potential positive and one potential negative explanation for the investing and financing cash flows. You should have 4 statements total (Investing - 1 positive explanation, 1 negative explanation; Financing - 1 positive, 1 negative). E.g. "The negative cash flow from investing could be a positive thing because the equipment we bought has a Buffalo Bills logo, which will bring in more customers!"

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter6: Statement Of Cash Flows

Section: Chapter Questions

Problem 11Q

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True or false, the financing activities section of the statement of cash flows reflects the cash flows that affect current assets and liabilities? True or false, buying property, plant and equipment would be considered a cash outflow from financing? True or false, the financing section of the statement of cash flows reflects transactions in the equity accounts and the long-term liability accounts?
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