Lee O’Brien is the president and majority shareholder of Fluff N’ Stuff, Inc., a small retail…

Lee O’Brien is the president and majority shareholder of Fluff N’ Stuff, Inc., a small retail store chain. Recently, O’Brien submitted a loan application for Fluff N’ Stuff, Inc., to Montvale National Bank. It called for a $300,000, 7%, 10-year loan to help finance the construction of a building and the purchase of store equipment, costing a total of $340,000, to enable Fluff N’ Stuff, Inc., to open a store in Montvale. Land for this purpose was acquired last year. The bank’s loan officer requested a statement of cash flows in addition to the most recent income statement, balance sheet, and retained earnings statement that O’Brien had submitted with the loan application.

As a close family friend, O’Brien asked you to prepare a statement of cash flows. From the records provided, you prepared the following statement.

 

After reviewing the statement, O’Brien telephoned you and commented, “Are you sure this statement is right?” O’Brien then raised the following questions: 1. “How can depreciation be a cash flow?” 2. “Issuing common stock for the land is listed in a separate schedule. This transaction has nothing to do with cash! Shouldn’t this transaction be eliminated from the statement?” 3. “How can the gain on sale of investments be a deduction from net income in determining the cash flow from operating activities?” 4. “Why does the bank need this statement anyway? They can compute the increase in cash from the balance sheets for the last two years.” After jotting down O’Brien’s questions, you assured him that this statement was “right.” However, to alleviate O’Brien’s concern, you arranged a meeting for the following day. a. How would you respond to each of O’Brien’s questions? b. Do you think that the statement of cash flows enhances the chances of Fluff N’ Stuff, Inc., receiving the loan? Discuss.

Place your order
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
error: Content is protected !!