How would this transaction affect starbucks balance sheet

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Reference no: EM131974972

1. Which one of the following is a use of cash?

a. decrease in accounts receivable

b. increase in notes payable

c. decrease in inventory

d. increase in accounts payable

e. increase in accounts receivable

2. Which of the following statement is true?

a. A common-size income statement presents each item as a percentage of net sales.

b. An income statement is the financial statement that summarizes changes in the company's cash balance over a period of time.

c. A cash flow statement is the financial statement that shows a financial snapshot, taken at a point in time, of all the assets the company owns and all the claims against those assets.

d. All else equal, an increase in a company's financial leverage will decrease its ROE

3. Starbucks sells used equipment with a book value of $250,000 for $350,000 cash. How would this transaction affect the Starbucks’ balance sheet?

a. Equity rises $350,000; net plant and equipment falls $250,000.

b. Cash rises $250,000; net plant and equipment falls $100,000; equity rises $150,000.

c. Cash rises $350,000; accounts receivable falls $250,000; goodwill rises $100,000.

d. Cash rises $350,000; net plant and equipment falls $250,000, equity rises $100,000.

4. The chief financial officer of R&E Supplies, Inc. is estimating the company's external financing needs for the next year. At the end of the year, the chief financial officer expects that owners' equity will be $180 million, total assets will amount to $500 million, and total liabilities will be $240 million. How much will R&E Supplies, Inc. need to borrow, or otherwise acquire, from outside sources during the year?

a. $80 million

b. $180 million

c. $240 million

d. $500 million

e. $320 million

Reference no: EM131974972

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