Powell company buys all of the outstanding common shares of south bay company on january1 in the year of acquisition for $1,500,000 cash and uses the acquisition method. if a contingent cash payment is a portion of the negotiated fair value of this acquisition, how will changes in the revaluation of the contingent performance payment affect the future financial statements? changes from the revaluation are reported in the income statement as ordinary income. revaluations affect the acquisition price and are recorded in the investment in south bay account. changes from the revaluation are reported as prior period adjustments and affect retained earnings. revaluations in contingent performance payments are recorded in apic—contingent equity outstanding. revaluations do not effect the future financial statements.

both are integral parts of a corporate balance sheet. the cash flow statement, or statement of cash flows, measures the sources of a company's cash and its uses of cash over a specific time period. the income statement measures a company's financial performance, such as revenues, expenses, profits or losses over a specific time period (in fact, it's sometimes called a statement of financial performance).

a cash flow statement shows exactly how much money a company has received and how much it has spent, traditionally over a period of one month. it captures the current operating results and changes on the balance sheet, such as increases or decreases in accounts receivable or accounts payable, and does not include noncash accounting items such as depreciation and amortization. the cash flow generally comes from revenue received as a result of business activity, but it may be augmented by funds available as a result of credit. a cash flow statement is used to determine the short-term viability and liquidity of a company, specifically how well it is positioned to pay its bills and vendors.

answer90,000;

the answers are

a, b, c, & e.