Timely Investments As the inflow and outflow of cash is on time you are left

# Timely investments as the inflow and outflow of cash

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Timely Investments: As the inflow and outflow of cash is on time, you are left with adequate free and liquid finances, which you may invest in time-bound instruments and securities Outside investor need to know the working capital as they will evalute the feasibility and capibility to repay the credit extended to the organization .In order to offers bank loan to Al Saad in case they need additional capital to keep their current business afloat . Problem worksheet 4.7 Salary Expenses 875,000 Cash 875,000 ( Accured Salary ) Cash 4,800,000 Revenue 4,800,000 ( Revenue Accured) Total Salary = 875 ,000 + 15,000 = 890,000 Total revenue = 480,000 + 100,000 = 490,000 Rent Accured 100,000 Rent 100,000 Salary Expense 15,000
Salary 15,000 Cash 250,000 Accured Rent 100,000 Rent 150,000 GENERAL JOURNAL Page Date Accounts Debit Credit Dec. 31 Salaries Expense 15,000 Salaries Payable 15,000 (year-end adjustme nt) Dec. 31 Accounts Receivab le 100,000 Service Revenue 100,000 (year-end adjustme nt) Total Salaries Expense =875,000+15,000 = 890,000
Total Rent Revenue = 4,800,000 + 100,000 = 4,900,000 Jan. 1 Salaries Payable 15,000 Salaries Expense 15,000 Jan. 1 Service Revenue 100,000 Accounts Receivab le 100,000 Jan. 10 Salaries Expense 40,000 Cash 40,000
Jan. 15 Cash 250,000 Accounts Receivab le 250,000 Jan. 10 Salaries Payable 15,000 Salaries Expense (20X5) 25,000 Cash 40,000 Jan. 15 Cash 250,000 Accounts Receivab le 100,000
Service Revenue 150,000 The net result for salaries expense is the same regardless of whether we reverse or not. That's on 1/10, a cash amount of \$40,000 was paid to cover salaries to date. The net result for rent revenue is the same regardless of whether we reverse or not. That's on 1/15, \$250,000 of cash was collecte to offset rent revenue to date.