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  • The 20x8 Income Statement and The 20x8 Comparative Balance Sheet

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    Muhammad Shahid
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    The board of directors of T-Bar-M Camp, Inc. questioned why the company's cash balance was so low given that 20X8 showed record profits. As the controller, the assistant must answer this question. They prepared a statement of cash flows for 20X8 which showed that while net income was high, operating cash flow was lower due to large cash payments. Specifically, inventory and accounts payable increased substantially. Therefore, while 20X8 was profitable, it was not a strong year in terms of cash flows.

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    The 20x8 Income Statement and the 20x8 Comparative Balance Sheet

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    The board of directors of T-Bar-M Camp, Inc. questioned why the company's cash balance was so low given that 20X8 showed record profits. As the controller, the assistant must answer this question. They prepared a statement of cash flows for 20X8 which showed that while net income was high, operating cash flow was lower due to large cash payments. Specifically, inventory and accounts payable increased substantially. Therefore, while 20X8 was profitable, it was not a strong year in terms of cash flows.

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    © All Rights Reserved
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    12 views1 page

    The 20x8 Income Statement and The 20x8 Comparative Balance Sheet

    Uploaded by

    Muhammad Shahid
    The board of directors of T-Bar-M Camp, Inc. questioned why the company's cash balance was so low given that 20X8 showed record profits. As the controller, the assistant must answer this question. They prepared a statement of cash flows for 20X8 which showed that while net income was high, operating cash flow was lower due to large cash payments. Specifically, inventory and accounts payable increased substantially. Therefore, while 20X8 was profitable, it was not a strong year in terms of cash flows.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    The 20X8 income statement and the 20X8 comparative

    balance sheet #6018


    The 20X8 income statement and the 20X8 comparative balance sheet of T-Bar-M Camp, Inc.,
    have just been distributed at a meeting of the camp's board of directors. The directors raise a
    fundamental question: Why is the cash balance so low? This question is especially troublesome
    since 20X8 showed record profits. As the controller of the company, you must answer the
    question.Required1. Prepare a statement of cash flows for 20X8 in the format that best shows
    the relationship between net income and operating cash flow. The company sold no plant
    assets or long-term investments and issued no notes payable during 20X8. There were no
    noncash investing and financing transactions during the year. Show all amounts in thousands.
    (pp. 630, 635-636)2. Answer the board members' question: Why is the cash balance so low?
    Point out the 2 largest cash payments during 20X8. (Challenge)3. Considering net income and
    the company's cash flows during 20X8, was it a good year or a bad year? Give your
    reasons.View Solution:
    The 20X8 income statement and the 20X8 comparative balance sheet

    ANSWER
    http://paperinstant.com/downloads/the-20x8-income-statement-and-the-20x8-comparative-
    balance-sheet/

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