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This question has to do with the Cash Account. Indicate the impact of the following corporate...

This question has to do with the Cash Account. Indicate the impact of the following corporate actions on cash, using the terms Increase, Decrease, or no change. For each, explain your conclusion. - A dividend is paid with funds received from a sale of debt - Real estate is purchased and paid for with short-term debt - Inventory is bought on credit - A short-term bank loan is repaid - Next years’ taxes are prepaid.

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Answer #1

Dividend paid with funds received from sale of debt - No change as Company has received cash from sale of debt(inflow) and paid dividend (outflow).

Real estate is purchased and paid for with short term debt - No change as the Company has received cash from short term debt(inflow) and paid the same to purchase real estate property (outflow)

Inventory is bought on credit - No change as there is no involvement of cash in the transaction

A short term loan is repaid - Decrease in cash as there is decrease in cash outflow

Next years taxes are prepaid - Decrease in cash Cash outflow as next year taxes are paid in the current year

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