The Desk Company manufactures office desks in Toronto, Ontario. The company has raised $1,000,000 from an issue of common shares. The company paid off a long-term bank loan of $200,000. The company then purchased property for $1.5 million and borrowed $500,000 by way of a Bank mortgage that is to be repaid in 10 years. The company sold surplus property that was not being used for $200,000. Required a) Calculate the cash used or cash from investingactivities. Explain the reasoning why a company may prefer financing by way of issuing common shares versus by borrowing from a Bank. Please explain fully with all calculations and table.
The Desk Company manufactures office desks in Toronto, Ontario. The company has raised $1,000,000 from an issue of common shares. The company paid off a long-term bank loan of $200,000. The company then purchased property for $1.5 million and borrowed $500,000 by way of a Bank mortgage that is to be repaid in 10 years. The company sold surplus property that was not being used for $200,000. Required a) Calculate the cash used or cash from investingactivities. Explain the reasoning why a company may prefer financing by way of issuing common shares versus by borrowing from a Bank. Please explain fully with all calculations and table.
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter14: Statement Of Cash Flows
Section: Chapter Questions
Problem 33E: Stillwater Designs is a private company and outsources production of its Kicker speaker lines....
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The Desk Company manufactures office desks in Toronto, Ontario. The company has raised $1,000,000 from an issue of common shares. The company paid off a long-term bank loan of $200,000. The company then purchased property for $1.5 million and borrowed $500,000 by way of a Bank mortgage that is to be repaid in 10 years. The company sold surplus property that was not being used for $200,000.
Required
a) Calculate the cash used or cash from investingactivities. Explain the reasoning why a company may prefer financing by way of issuing common shares versus by borrowing from a Bank.
Please explain fully with all calculations and table.
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