Question

Can a company show an increase in cash even if reporting a net loss? Why?

Can a company show an increase in cash even if reporting a net loss? Why?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

YES, company can show an increase in cash even if reporting a net loss.

Explanation

Sources of income of cash for a company can be different. These may involve the recovery of debts, acquisition of new loans, sale of an asset or any miscellnious payment received shows an increase in cash.

On the other hand company reporting a net loss is different as whether a company have net profit or net loss it is concluded only after the preparation of financial statements (income statement) and these are prepared the end of an accounting year. But during the year company goes through different transactions which may involve income of cash and ultimately statement of company will show increase in cash.
All the transactions will also take place even if the company is reporting a net loss.

So, it can be said that a company can show increase in cashveven if reporting at net loss.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Jackson Company had a net increase in cash from operating activities of $10,000 and a net...
Jackson Company had a net increase in cash from operating activities of $10,000 and a net decrease in cash from financing activities of $4,000. If the beginning and ending cash balances for the company were $5,000 and $15,000, then net cash change from investing activities was: an outflow or decrease of $4,000. an inflow or increase of $1,000. an inflow or increase of $4,000. zero.
Jackson company had a net increase in cash from operating activities of $9100 and a net...
Jackson company had a net increase in cash from operating activities of $9100 and a net decrease in cash from financing activities of $2650. if the beginning and ending cash balances for company were $4100 and $13200 then net cash change from investing activities was
The accounting records of Harrison Company provided the data below.    Net loss $ 12,000 Depreciation...
The accounting records of Harrison Company provided the data below.    Net loss $ 12,000 Depreciation expense 14,000 Increase in salaries payable 3,000 Decrease in accounts receivable 6,000 Increase in inventory 6,800 Amortization of patent 900 Decrease in discount on bonds 700 Required: Prepare a reconciliation of net income to net cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign.) Cash flows from operating activities: Net loss: Adjustments for noncash affects: - -...
Wynn Sheet Metal reported a net operating loss of $116,000 for financial reporting and tax purposes...
Wynn Sheet Metal reported a net operating loss of $116,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 35%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2014 $ 68,000 25 % $ 17,000 2015 78,000 25 19,500 2016 88,000 35 30,800 2017 68,000 40 27,200 Required: 1. Prepare the journal entry to recognize the income tax benefit...
Wynn Sheet Metal reported a net operating loss of $130,000 for financial reporting and tax purposes...
Wynn Sheet Metal reported a net operating loss of $130,000 for financial reporting and tax purposes in 2018. The enacted tax rate is 30%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2014 $ 75,000 20 % $ 15,000 2015 85,000 20 17,000 2016 95,000 30 28,500 2017 75,000 40 30,000 Required: 1. Prepare the journal entry to recognize the income tax benefit...
Why would companies choose a carry-back of net operating loss instead of a carry-forward? explain Why...
Why would companies choose a carry-back of net operating loss instead of a carry-forward? explain Why are there differences in reporting amounts for deferred taxes among the most frequent between IFRS and US GAAP? explain
Wynn Farms reported a net operating loss of $205,000 for financial reporting and tax purposes in...
Wynn Farms reported a net operating loss of $205,000 for financial reporting and tax purposes in 2021. The enacted tax rate is 25%. Taxable income, tax rates, and income taxes paid in Wynn’s first four years of operation were as follows: Taxable Income Tax Rates Income Taxes Paid 2017 $ 69,000 30 % $ 20,700 2018 79,000 30 23,700 2019 125,000 40 50,000 2020 40,000 45 18,000 Required: 1. NOL carrybacks are not allowed for most companies, except for property...
The accounting records of Unlucky Company provided the data below. Net loss $40,000 Depreciation expense 12,000...
The accounting records of Unlucky Company provided the data below. Net loss $40,000 Depreciation expense 12,000 Increase in salaries payable 11,000 Increase in accounts receivable 4,000 Decrease in inventory 4,800 Amortization of patent 700 Decrease in premium on bonds 500 Required: Prepare a reconciliation of net loss to net cash flows from operating activities. (Cash flows from operating activities using the indirect method).
Compare free cash flow to net increase in cash on the statement of cash flows. Is...
Compare free cash flow to net increase in cash on the statement of cash flows. Is it better to have a positive free cash flow or a negative free cash flow? Why?
What impact does depreciation have on the net income/loss and also on tax reporting? Please explain...
What impact does depreciation have on the net income/loss and also on tax reporting? Please explain in your own words and provide examples
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT