If the accounts receivable balance at the beginning of the year is $10,000 and it grows to $15,000 by the end of the year, is this increase of $5,000 in accounts receivable (added to or subtracted from) net income when calculating the cash flow from operations? Why?


5. Where on the balance sheet would you look to see if a business has enough cash to finance next year's additional investment of $1,000,000 in new plant property and equipment (on the asset side of the balance sheet or on the liabilities and equity side)? Specifically, in which account or accounts?

6.Ingram Corporation is building its projected balance sheet for the following year, and it arrives at the following numbers. Total assets will equal  $10,000,000 while total liabilities and equity will equal $9,500,000. To make this happen, will Ingram Corporation need to borrow money in the coming year, or will it have excess money to put into marketable securities?

Answer rating: 100% (QA)

5 The increase of 5000 in accounts receivable is not directly added or subtracted from net income wh... View the full answer