submit typed answer in good format with supporting calculations:uncertainty its operates under ideal conditions of uncertainty, with
Question:
submit typed answer in good format with supporting calculations:uncertainty its operates under ideal conditions of uncertainty, with a fiscal year end of December 31st. its cash flows depend crucially on the state of economy. o January 1, 2024, uncertainty acquired equipment to be used in its operation. in 2024, cash flows from selling goods from the equipment will be $ 15,000 if the economy is good, and $10,000 if it is bad. in 2024, cash flows from selling goods from the equipment will be $20,000 if the economy is good and $10,000 if it is bad. in 2026, cash flows from selling goods from the equipment will be $35,000 if the economy is good, and $20,000 if it is bad. operating cash flows are received at yearend. whether conditions are good or bad, uncertainty will cease operations at the end of the third year. at that point, uncertainty will have a residual value of $6,000, which will be received on January 1, 2027. uncertainty ltd. financed the asset by issuing $5,000 per value 7% stated interest bonds period to yield 5%. interest is paid at the end of the first year and second years, art which time the bonds mature. the reminder of the asset cost is financed by issuing common shares. at the start of each year, the profitability that the economy will be good is 0.7, and 0.3 that it will be poor. the interest rate in the economy is 5% for all three years. uncertainty does not pay any individuals in these years. round dollar figures to the nearest dollar. REQUIRED: A. in 2024, the economy turns out to be bad. prepare an income statement in good form for 2024, and a balance sheet as oat the end of 2024. include your calculations on you rough work page.
B. wear would be the net income for 2025 and cash balance at the end of 2025, assuming the economy turns out to be good? show your calculations.
Financial Accounting Theory
ISBN: 9780134166681
8th Edition
Authors: William R. Scott, Patricia O'Brien