Below are the most recent balance sheets for Country Kettles, Inc. Excluding accumulated depreciation, determine whether each
Question:
Below are the most recent balance sheets for Country Kettles, Inc. Excluding accumulated depreciation, determine whether each item is a source or a use of cash and the amount:
COUNTRY KETTLES, INC. Balance Sheets 2019 2020 Assets Cash $ 40,414 $ 39,291 Accounts receivable 93,041 97,621 Inventories 80,925 94,833 Property, plant, and equipment 199,474 209,207 Less: Accumulated depreciation 60,830 66,419 Total assets $353,024 $374,533 Liabilities and Equity Accounts payable $ 65,489 $ 67,855 Accrued expenses 8,359 7,497 Long-term debt 34,074 37,180 Common stock 21,000 25,300 Accumulated retained earnings Total liabilities and equity 224,102 $353,024 236,671 $374,533
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Sourceuse SourceUse Cash Use 1123 Accounts Receivable U...View the full answer
Fundamentals Of Corporate Finance
ISBN: 9781265553609
13th Edition
Authors: Stephen Ross, Randolph Westerfield, Bradford Jordan
Related Video
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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