On July 31 of the Current Year, Bridges Industries Borrowed

question 47

Short Answer

On July 31 of the current year, Bridges Industries borrowed $60,000 from the First National Bank.The $60,000 was used to pay dividends of $40,000 to stockholders and purchase a $20,000 piece of equipment.How will these transactions be reported in the statement of cash flows?

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Definitions:

Break-Even Sales Revenue

The amount of revenue needed to cover all fixed and variable costs of a business.

Safety Margin

The difference between the actual performance or capacity of a system and its expected or required performance, serving as a buffer for uncertainty.

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent or salaries.

Unit Contribution Margin

The amount by which the selling price of a unit exceeds its variable cost, often used to assess the profitability of individual products.