What accounting events trigger changes in the retained earnings account

Required: 1. What accounting events trigger changes in the retained earnings account? 2. Explain the differences between cash flows from operating, financing, and investing activities. It is based on the statement of cash flows presented. 3. If a company increases its accounts payable compared to the previous year, what will be the effect on the cash account? 4. How do increases in fixed assets from one period to the next affect the cash account? 5. List at least three working capital accounts that represent sources of cash for the firm and the changes the financial manager would have to make to those accounts to improve the cash account for the next firm’s closing period. 6. What does “decrease in short-term notes” mean in Davis Corporation, LLC’s financial statement and how does it affect the cash balance at the end of the period? 7. From Davis Corporation, LLC’s statement of cash flows, discuss what may have caused the greatest change in the company’s cash flow position for 20×9 compared to the prior year. Transcribed Image Text: Davis Corporation, LLC Statement of Cash Flows (S million)
Year Ending December 31, 20×9
Operating Activities
Net income
$42
Plus depreciation
Less increase in accounts receivables
Less increase in inventories
Plus increase in accounts payable
Cash flows from operations
30
(5)
(33)
1
$35
Investment Activities
Less increase in gross fixed assets
Financing Activities
Decrease in short-term notes
Increase in long-term debt
Issued new common stock in par value and additional
paid in capital
Less dividends paid to owners
Financing cash flows
($39)
(2)
11
4
(10)
$3
($1)
Decrease in cash
Beginning cash
Ending cash
21
$20

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