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Johnsfield Cash Flow concepts

Johnsfield & Co. will be undertaking the following financial transactions in the next planning period. For each transaction represented in the table below, check the statement or statements that will be affected immediately.

`Pro Forma Income Pro Forma Balance
Transaction Cash Budget Statement Sheet
Cash Sales
Credit Sales
Account Receivable
are collected
Assets with 5-year Life
are purchased
Depreciation is taken
Amortization of goodwill is taken
Sale of common stock
Retirement of outstanding bonds
Fire Insurance premium is paid for the next 3 year

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See Excel attached.

3-10 Johnsfield Company
Statement
Pro Forma Income Pro Forma Balance
Transaction Cash Budget Statement Sheet
Cash Sales yes yes yes
Credit Sales no yes yes
Account Receivables are Collected yes no yes
Assets with 5-year Life are purchased yes no yes
Depreciation ...

Solution Summary

The solution lists each statement or statements affected by the transactions presented. Following the table, each no answer is explained.

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