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Ritter Corporation?s accountants prepared the following financial statements for year-end 2019: a. Explain the change in cash

Question:

Ritter Corporation?s accountants prepared the following financial statements for year-end 2019:

a. Explain the change in cash during 2019.

b. Determine the change in net working capital in 2019.

c. Determine the cash flow generated by the firm?s assets during 2019.

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Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial...
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RITTER CORPORATION Income Statement 2019 Revenue $797 576 Expenses Depreciation 92 Net income $129 $ 97 Dividends RITTER CORPORATION Balance Sheet December 31 Assets 2018 2019 $ 63 $ 84 Cash Other current assets 175 192 Net fixed assets 398 417 Total assets $636 $693 Liabilities and Equity $ 129 $146 Accounts payable Long-term debt Stockholders' equity 163 155 352 384 Total liabilities and equity $636 $693

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a The accounting statement of cash flows explains the change in cash during the year The accounting ...View the full answer


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Related Book For  answer-question
Corporate Finance

Corporate Finance

ISBN: 978-1259918940

12th edition

Authors: Stephen Ross, Randolph Westerfield, Jeffrey Jaffe, Bradford Jordan

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Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

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