What are the two ways that firms can distribute cash to shareholders?

How does interest equate cash flow over time?

Liabilities are measured and reported at their current cash equivalent amount. Explain.

The board of directors of the Cortez Beach Yacht Club (CBYC) is developing plans to acquire more equipment for lessons and rentals and to expand club facilities. The board plans to purchase about $50,000 of new equipment each year and wants to begin a fund to purchase a$600,000 piece of property for club expansion.

The club manager is concerned about the club’s capability to purchase equipment and expand its facilities. One club member has agreed to help prepare the following fi nancial statements and help the manager ascertain whether the plans are realistic. Additional data follows the financial statements.

$$\begin{array}{c} \textbf{CORTEZ BEACH YACHT CLUB}\\ \textbf{Statement of Income (Cash Basis)}\\ \textbf{For the Year Ended October 31 } \end{array}$$

Additional Information

1. Other fi nancial information as of October 31, Year 9:
   a. Cash in checking account, $14,000.
   b. Petty cash,$600.
   c. Outstanding mortgage balance, $720,000.
   d. Accounts payable for supplies and utilities unpaid as of October 31, Year 9, and due in November Year 9,$5,000.
2. The club purchased $50,000 worth of sailing equipment during the current fi scal year (ending October 31, Year 9). Cash of$20,000 was paid on delivery, with the balance due on October 1, which had not been paid as of October 31, Year 9.
3. The club began operations in year 3 in rental quarters. In October Year 5, it purchased its current property (land and building) for $1,200,000, paying$240,000 down and agreeing to pay $60,000 plus 6 percent interest annually on the previously unpaid loan balance each November 1, starting November 1, Year 6.
4. Membership rose 3 percent during year 9, approximately the same annual rate of increase the club has experienced since it opened and that is expected to continue in the future.
5. Membership fees were increased by 15 percent in year 9. The board has tentative plans to increase them by 10 percent in year 10.
6. Lesson and class fees have not been increased for three years. The number of classes and lessons has grown signifi cantly each year; the percentage growth experienced in year 9 is expected to be repeated in year 10.
7. Miscellaneous revenues are expected to grow in year 10 (over year 9) at the same percentage as experienced in year 9 (over year 8).
8. Lesson and class employees’ wages and benefi ts will increase to$604,650. The wages and benefi ts of regular employees and the manager will increase 15 percent. Equipment depreciation and supplies, utilities, and miscellaneous expenses are expected to increase 25 percent.

Required
Identify any operating problem(s) that this budget discloses for CBYC. Explain your answer.

How to calculate present value of cash flow with discount rate?

Distinguish among the three activities reported in the statement of cash flows.

Find the reduced form of the matrix and use this to determine the rank of the matrix. Also find a basis for the row space of the matrix and a basis for the column space.

$$\left(\begin{array}{cccc} -4 & -1 & 1 & 6 \\ 0 & 4 & -4 & 2 \\ 1 & 0 & 0 & 0 \end{array}\right)$$

Distinguish between a fair value hedge and a cash flow hedge.

The purchase of equipment for cash would be recorded in which special journal?

Why should cash receipts be deposited on the day of receipt?

What are some investing activities reported on the statement of cash flows?

Does depreciation expense affect net cash flow? Explain.

Record the following transactions:

C. Increased petty cash by $80.

List the three categories of activities used on the statement of cash flows.