On the indirect statement of cash flows, $500,000 relating to notes payable was subtracted from net income to get indirect cash flow from operations. This must mean that:
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On the indirect statement of
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- What are two ways to report a companys net cash flow from operating activities? Briefly describe each method.Which of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method? a) Decrease in accounts payable b) Depreciation expense c) Amortization expense d) Decrease in accounts receivableSanders, Inc. reported net income of S205. Beginning and ending balances of accounts receivable were S40 and S45, respectively. Accounts payable balances at the beginning and ending ofthe year were S35 and S33, respectively. Assuming all relevant information has been presented, Sanders should report net operating cash flows of:
- When using the Indirect Method of preparing the Statement of Cash Flows, in the operating section, some accounts are added and some costs are subtracted. If you had to explain to someone why an increase in accounts receivable is subtracted and the opposite as to why a decrease in accounts receivable is added, what information would you relay to them? (Include in your response the concept of accruals, FASB guidelines, sales and net income on the income statement, the balance sheet). Answer should be in a paragraph form.The income statement and the cash flows from operating activities section of the statement of cash flows are provided below for Syntric Company. The merchandise inventory account balance neither increased nor decreased during the reporting period. Syntric had no liability for insurance, deferred income taxes, or interest at any time during the period. Sales Cost of goods sold Gross margin Salaries expense Insurance expense Depreciation expense Depletion expense Interest expense Gains and losses: Gain on sale of equipment Loss on sale of land Income before tax Income tax expense SYNTRIC COMPANY Income Statement For the Year Ended December 31, 2024 ($ in thousands) Net income Cash Flows from Operating Activities: Cash received from customers Cash paid to suppliers Cash paid to employees Cash paid for interest Cash paid for insurance Cash paid for income tax Net cash flows from operating activities $35.0 16.9 9.0 3.4 10.4 $ 271.7 (168.8) 102.9 (74.7) 19.0 (6.4) 40.8 (20.4) $ 20.4 $225.0…Use the Indirect Method to calculate the Cash Flow form operation activities, when net income is 100,000 and depreciation amount is 4500. Additionally, the beginning of period balance for accounts receivable, Inventory and Accounts Payable are 5600, 4500 and 3500, respectively. While, the End of period balances for accounts receivable, Inventory and Accounts Payable are 8100, 3500 and 4800, respectively.
- Smith Enterprises reports the following information: Net income Depreciation expense Increase in accounts payable Increase in accounts receivable $5240000 O $5790640. O $4063360. O $6416640. O $5240000. 712640 151000 313000 Smith should report cash provided by operating activities ofFor each transaction, indicate how the item would appear on the cash flow 15. Treasury bills were purchased for P50,000 cash. , Indicate whether the items is: (I) (0) (N) a cash inflow = a cash outflow = neither a cash inflow or cash outflow L Indicate also how the item would be classified on the cash flow statement using the following symbols. (0) (I) (F) (N) = operating activity investing activity financing activity does not appear in the statement of cash flow %3D Transactions a b 1. Credit sales for the month are P240,000 2. Cash sales for the month are P200,000. 3. P40,000 of accounts receivable are collected. 4. Five-year bonds are issued at the face value of P600,000. 5. 2,000 shares of common stock are issued for P400,000. 6. Paid P4,000 in interest on a notes payable. 7. The company borrows P80,000 from the bank and signs a five-year note. 8. New equipment is purchased for P100,000 cash. 9. Repaid P20,000 in principal on a mortgage payable. 10. Paid P24,000 to employees for…Each of the following is added to net income in computing net cash provided by operating activities except Select one: a. Amortization expense. b. An increase in accrued expenses payable. c. A decrease in inventory. d. A gain on sale of equipment
- Which of the following would be subtracted from net income when using the indirect method to derive net cash from operating activities? a. Decrease in accounts payable b. Loss on sale of investments c. Decrease in accounts receivable d. Depreciation expenseWhen the Direct Method is used to report operating activities in the Statement of Cash Flows, the company must disclose in the notes to. reconciliation of net income with final cash balance b. interest and income taxes (income taxes). c. reconciliation of net income with operating net cash d. salaries and income taxes (income taxes). e. reconciliation of net income with the beginning cash balance! Required information [The following information applies to the questions displayed below.] The following information pertains to the inventory of Parvin Company during Year 2. January 1 April 1 700 units @ $31 2,600 units @ $36 900 units @ $39 October 1 Beginning Inventory Purchased Purchased During Year 2, Parvin sold 3,900 units of inventory at $85 per unit and incurred $44,500 of operating expenses. Parvin currently uses the FIFO method but is considering a change to LIFO. All transactions are cash transactions. Assume a 40 percent income tax rate. Parvin started the period with cash of $81,000, inventory of $21,700, common stock of $56,000, and retained earnings of $46,700. d. Determine the cash flow from operating activities under FIFO and LIFO. (Amounts to be deducted should be indicated with minus sign.)