Krupt, Inc., an international company, classified cash transferred to Krupt from its subsidiaries in foreign countries as cash collected from customers on its statement of cash flows. The subsidiaries classified the same cash transferred to Krupt, Inc., the parent company, as payment of long-term debt on their statements of cash flows. Which sections of the consolidated statement of cash flows (both the parent and its subsidiaries combined) will be affected and how? Does this classification of cash seem ethical?

Question

Krupt, Inc., an international company, classified cash transferred to Krupt from its subsidiaries in foreign countries as cash collected from customers on its statement of cash flows.  The subsidiaries classified the same cash transferred to Krupt, Inc., the parent company, as payment of long-term debt on their statements of cash flows.  Which sections of the consolidated statement of cash flows (both the parent and its subsidiaries combined) will be affected and how? Does this classification of cash seem ethical?

Quizplus · Accepted Answer

The Answer of Krupt, Inc., an international company, classified cash transferred to Krupt from its subsidiaries in foreign countries as cash collected from customers on its statement of cash flows.  The subsidiaries classified the same cash transferred to Krupt, Inc., the parent company, as payment of long-term debt on their statements of cash flows.  Which sections of the consolidated statement of cash flows (both the parent and its subsidiaries combined) will be affected and how? Does this classification of cash seem ethical?