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Avatar Company Uses the Direct Method to Prepare Its Statement

question 150

Essay

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following financial statement information for the year 2014: $Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following financial statement information for the year 2014: Additional information provided: • Equipment costing $52,000 was purchased for cash. • Equipment with a net asset value of $10,000 was sold for $14,000 • Depreciation expense of $12,000 was recorded during the year. • During 2014, the company repaid $40,000 of long-term notes payable. • During 2014, the company borrowed $34,000 on a new note payable • There were no stock retirements during the year. • There were no sales of treasury stock during the year. Please prepare a complete statement of cash flows using the direct method, in the following format: \begin{array} { | l | l | l | } \hline \text { Operating activities: } &\quad\quad &\quad\quad \\ \hline \text { Receipts } & & \\ \hline \text { Collections from customers } & & \\ \hline \text { Interest received } & & \\ \hline \text { Total cash receipts } & & \\ \hline \text { Tayments } & & \\ \hline \text { To employees } & & \\ \hline \text { For interest } & & \\ \hline \text { For income tax } & & \\ \hline \text { Total cash payments } & & \\ \hline \text { Net cash from operating activities } & & \\ \hline & & \\ \hline \text { Investing activities: } & & \\ \hline \text { Proceeds from sale of assets } & & \\ \hline \text { Acquisition of assets } & & \\ \hline \text { Net cash from investing activities } & & \\ \hline & & \\ \hline \text { Financing activities: } & & \\ \hline \text { Issuance of stock } & & \\ \hline \text { Purchase of treasury stock } & & \\ \hline \text { Borrowing on notes payable } & & \\ \hline \text { Repayments of notes payable } & & \\ \hline \text { Payment of dividends } & & \\ \hline \text { Net cash from financing activities } & & \\ \hline\\ \hline \text { Net change in cash } & & \\ \hline \text { Cash balance, December 31, 2013} & & \\ \hline \text { Cash balance, December 31, 2014 }\\ \hline \end{array}$
Additional information provided:
• Equipment costing $52,000 was purchased for cash.
• Equipment with a net asset value of $10,000 was sold for $14,000
• Depreciation expense of $12,000 was recorded during the year.
• During 2014, the company repaid $40,000 of long-term notes payable.
• During 2014, the company borrowed $34,000 on a new note payable
• There were no stock retirements during the year.
• There were no sales of treasury stock during the year.
Please prepare a complete statement of cash flows using the direct method, in the following format:
$\begin{array} { | l | l | l | } \hline \text { Operating activities: } &\quad\quad &\quad\quad \\\hline \text { Receipts } & & \\\hline \text { Collections from customers } & & \\\hline \text { Interest received } & & \\\hline \text { Total cash receipts } & & \\\hline \text { Tayments } & & \\\hline \text { To employees } & & \\\hline \text { For interest } & & \\\hline \text { For income tax } & & \\\hline \text { Total cash payments } & & \\\hline \text { Net cash from operating activities } & & \\\hline & & \\\hline \text { Investing activities: } & & \\\hline \text { Proceeds from sale of assets } & & \\\hline \text { Acquisition of assets } & & \\\hline \text { Net cash from investing activities } & & \\\hline & & \\\hline \text { Financing activities: } & & \\\hline \text { Issuance of stock } & & \\\hline \text { Purchase of treasury stock } & & \\\hline \text { Borrowing on notes payable } & & \\\hline \text { Repayments of notes payable } & & \\\hline \text { Payment of dividends } & & \\\hline \text { Net cash from financing activities } & & \\\hline\\\hline \text { Net change in cash } & & \\\hline \text { Cash balance, December 31, 2013} & & \\\hline \text { Cash balance, December 31, 2014 }\\\hline\end{array}$

Assess the reasons behind the 2007 mortgage crisis and the failure of mortgage-backed CDOs.

Apply the concept of yield comparison to evaluate investment risk and return in bond markets.

Identify the factors contributing to the risk assessment of bonds, including the market's perception of default risk.

Understand Maslow's hierarchy of needs and identify examples of each level within various contexts.

Definitions:

Central Selling Feature

A key attribute or benefit of a product that sets it apart from its competitors and is emphasized in marketing efforts.

Incentive

Something that motivates or encourages someone to do something.

Quick Action

Immediate or prompt response to a situation, often requiring decisiveness and efficiency.

Maslow's Hierarchy

A psychological theory proposed by Abraham Maslow that outlines a five-tier model of human needs, depicted as hierarchical levels within a pyramid.