BALANCE SHEET Which of the following actions are most ikely to directly increase
ID: 2598165 • Letter: B
Question
BALANCE SHEET Which of the following actions are most ikely to directly increase cash as shown on a firm's balance sheet? Select the appropriate assumptions that underlie your answer a. It issues $7 million of new common stock. b. It buys new plant and equipment at a cost of $3 million. . It reports a large loss for the year. d. It increases the dividends paid on its common stock I. Statements (b) and (d) will increase the amount of cash on a company's balance sheet. Statement (a) will decrease cash through the sale of common stock. Selling stock uses cesh from financing activities. On one hand, Statement (c) would decrease cash; however, it is also possible that Statement (c) would increase cash, if the firm receives a tax refund for taxes paid in a prior year IL Statements (b) and d will increase the amount ce cash on a company's balance sheet. Statement (a) will increase cash through the sale of common stock. Selling stock provides through financing activities. On one hend, Statement (c) would decrease cash; however, it is also possible th Statement (c) would increase cash, the firm recelves a tax refund for taxes paid in a prior year 11. Statements (b) and (d) will decrease the amount of cash on a company's balance sheet. Statement (a) will increase cash through the sale of common stock. Selling stock provides cash through financing activities. On one hand, Statement (c) would decrease cash; however, it is also possible that Statement (c) would increase cash, if the firm receives a tax refund for taxes paid in a prior year. Statements (b) and (d) will decrease the amount of cash on a company's balance sheet. Statement (a) will decrease cash trough the sale ofcommon stock. Seing stock uses cash from fnancing activities. On one hand, Statement (c) would decrease cash, however, it is aso possible that Statement (c) would increase cash, if the firm receives a tax nefund for taxes paid in a prior V. Statements (b) and (d) will decrease the amount of cash on a company's balance sheet. Statement (a) will increase cash through the sale of common stock. Seling stock provides cash through financing activities. Statement (c) would neither increase or decrease cash for taxes paid in a prior year. Seect Save & ContinExplanation / Answer
Answer : V) Statements (b) and (d) will decrease the amount of cash on a company’s balance sheet. Statement (a) will increase cash through the sale of common stock .selling stock provides cash through financial activities . statement (c) would neither increase or decrease cash for taxes paid in a prior year.
a. increases cash by selling stock
b. decrease
c. no direct effect on cash (depreciation on equipment begins once in use)
d. decrease (if a company declares a dividend, it is just a recording)
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