What would be the effect on 2022 pretax income

Reference no: EM133538082

Case: What would be the effect of each of the following on 2022 pretax income (PTI) and cash from operations (CFO)? Your answer should include all effects during 2022 (e.g., if NMG purchases equipment during 2022 and puts it in service, the answer should include the effects of both the purchase and depreciation). You may ignore taxes. Please fill in a number with a +/- and no spaces. If the answer is zero, enter the number 0. For example, if the question said, "During 2022 NMG provides 100 of advertising to a customer and is paid in cash," the answer would be: PTI: +100 CFO: +100 because 100 of sales revenue was recorded and 100 of operating cash was received from customers.

1. On June 30, 2022, NMG repays 106 on a one-year loan. 100 was borrowed on June 30, 2021 with 6% annual interest.

2. On January 1, 2022, NMG sells equipment for $50. The equipment was purchased for $100 and put in service on January 1, 2021. It had an expected useful life of 3 years and an expected salvage of $10.

3. During 2022, NMG pays dividends of $100.

4. On June 30, 2022, NMG purchases a share of stock in Coca Cola for $100. Coca Cola pays NMG a dividend of $2 during 2022.

5. On June 30, 2022, NMG receives 100 in cash from a customer for a digital subscription that runs from July 1, 2022 to June 30, 2023.

Reference no: EM133538082

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