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Text Questions Chapter 6

# Text Questions Chapter 6 - Text Questions Chapter 6 23...

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Exercises E6-5, E6-10, E23-11 and E23-12 Chapter 23 Question 1 University of Phoenix ACC/421 Instructor: Lee Kroll By Scott Ward

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E6-5 (a) \$30,000 X 4.96764 = \$149,029.20 (b) \$30,000 X 8.31256 = \$249,376.80 (c) \$30,000 X 3.03735 X .50663 = \$46,164.38 E6-10 (a) The number of interest periods is calculated by first dividing the future value of \$1,000,000 by \$92,296, which is estimated to be 10.83. The factor 10.83 or its approximate is then located in the Future value of 1 Table by looking down the 10% column to the 25-period line. This means that with the proper conditions, 25 is the unknown number of years Mike must wait to become a millionaire. (b) The unknown interest rate is calculated by first dividing the future value of \$1,000,000 by the present investment of \$182,696, which is 5.47357. The factor or its approximate is then located in the Future value of 1 Table by looking across the 15-period line to the 12% column. This means that 12% is the interest rate Serena Williams must earn on his investment to become a millionaire. E23-11
Pat Metheny Company STATEMENT OF CASH FLOWS For the Year Ended December 31, 2008 (Indirect Method) Cash flows from operating activities Net income \$ 810 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense \$ 30 Gain on sale of investments (80) Decrease in inventory 300 Increase in accounts payable 300 Increase in receivables (450) Decrease in accrued liabilities (50 ) 50 Net cash provided by operating activities 860 Cash flows from investing activities Sale of held-to-maturity investments 200 Purchase of plant assets (130 ) Net cash provided by investing activities 70 Cash flows from financing activities

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Issuance of capital stock 130 Retirement of bonds payable (150) Payment of cash dividends (260 ) Net cash used by financing activities
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Text Questions Chapter 6 - Text Questions Chapter 6 23...

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