Valance & Company Use the Selected Data from the Balance Sheet and Cash

Question

Examlex · Accepted Answer

The Answer is (1)Accounts payable and accrued expenses increased in 2018 and 2017 due to growth in the business.Other noncurrent liabilities increased for perhaps the same reason.Long-term debt decreased in both years although much more in 2018.Loans payable increased in both years,perhaps in conjunction with the repayment of long-term debt due to taking advantage of lower short-term interest rates.The increase in debt will generally lower profits due to higher interest expense.Overall,Valance does not seem to be significantly impacted by these changes.Additional information from the rest of the financial statements would be needed to provide a complete answer to this question.

(2)The Dividends Payable account would not appear in the Operating Activities category of the cash flow statement.Dividends are a reduction of retained earnings rather than an expense on the income statement.The change in dividends payable would appear in the Financing Activities category of the cash flow statement as shown above.

Valance & Company Use the Selected Data from the Balance Sheet and Cash

Definitions: