for 24,
suprme health sold its AR to SPE, and analyst adjusted the manipulation.
My question is the total cash flow in consolidation statement should be the same? Why the answer just mentioned about total AR amount in the statement. I guess that the question assumed SH used cash while it created SPE?
Sorry that i did not post the picture and question on my post, but i don’t know how to post the e-curriculum book here.
Anyone who knows how to embed a picture in posts?
Normally it would sell AR and receive cash, so its balance sheet will have extra cash. However, since it will consolidate back the SPE anyway, it will show the same AR that it sold in its balance sheet. So compared to the previous balance sheet, now it will have 1) extra cash 2) same AR and 3) extra liabilities (because of the SPE). Revenue not affected in any way (but there will be a line in income statement _ below _ operating income for sale of AR).
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