You have been hired as a forensic accountant to investigate a case of embezzlement. You have obtained the following information:

• The company had $500,000 in cash at the beginning of the year.
• The company generated $1 million in cash inflows from operations during the year.
• The company had $600,000 in cash outflows for operating expenses during the year.
• The company had $150,000 in cash outflows for capital expenditures during the year.
• The company had $100,000 in cash outflows for financing activities during the year.
• The company's bank statement shows an ending balance of $450,000.
• The company's accountant indicates that $50,000 of the cash inflows were misappropriated by an employee.

Using the information provided, determine the total amount of the embezzlement and explain the impact of the embezzlement on the company's cash flows. Show all your calculations and provide your answer.

Answer rating: 100% (QA)

The detailed answer for the above question is provided below Step 1 Calculate the total cash inflows The total cash inflows can be calculated as follo... View the full answer