In 250–280 words explain how balances are transferred into and out of cash flow
ID: 2578687 • Letter: I
Question
In 250–280 words explain how balances are transferred into and out of cash flow statements and how the closing cash is calculated. Upload a file (7MB max) 2 Consider this summary of cash graph. Which month is the best to fund a cash purchase of a new deep-fryer worth $3,000? What makes it the best month? What is the advantage of paying cash for the fryer instead of taking out a small loan? (80–100 words) Graph showing a summary of cash levels by month between the months of October and December. Upload a file (7MB max) 3 Explain in 80–120 words which other budgets are used to prepare and check the accuracy of the budgeted statement of financial position.
Explanation / Answer
how balances are transferred into and out of cash flow statements and how the closing cash is calculated Answer - First of all we have opening cash balance 1. Then we add cash profit to Above ( Cash profit = Profit after tax + Dep ) 2. Then we add or less working capital changes in to this , for all enhances in current assets we reduce cash balance and for all current liabilities increase we enhance cash balance Like if stock and inventory along with other all current assets has gone up by USD 1000 then cash balance we have to reduce by 1000 , and vice versa And if creditors along with other current liabities has gone up by USD 1000 then we have enhance cash balance by the same amount and vice versa . 3. Then we have to adjust for investment activity , like we have bought fixed assets , equipments in cash payment then we have to reduce cash balance for the same and vice versa 4. then we have to adjust for financing activity , like if taken loans then we have to enahnce cash balance and vice versa . Cash flow statemnet , profit and loss and balacne sheet are required to check accuracy of the budgeted financial statements