Solution

Chapter 4 Discussion Questions |4-1. |What argon the basic benefits and purposes of developing pro forma statements and a cash budget? | | | | | |The pro-forma financial statements and cash budget enable the firm to determine its future level of asset necessarily and the| | |associated financing that will be required. Furthermore, one can steer actual events against the projections. Bankers | | |and other lenders also use these financial statements as a guide in credit decisions. | | | | |4-2. |Explain how the collections and purchases schedules argon related to the borrowing needs of the corporation.

| | | | | |The collections and purchase schedules measure the revivify at which receivables are collected and purchases are paid. To | | |the extent collections do not cover purchasing costs and other financial requirements, the firm must look to borrowing | | |to cover the deficit. | | | | |4-3. |With inflation, what are the implications of using LIFO and FIFO inventory methods? How do they reach the cost of | | |goods sold?... If you want to get a plenteous essay, order it on our website: Orderessay

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