FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- The purchase of a long-term asset is classified in the statement of cash flows as a(n) a. Operating activity. b. Investing activity. c. Financing activity. d. Noncash activity.arrow_forward(Appendix) When preparing a schedule for the calculation of cash generated from operating activities under the direct method, an increase in Depreciation Expense is a.subtracted from operating expenses. b.subtracted from net income. c.added to net income. d.added to operating expenses.arrow_forward18. When using the indirect method to prepare the operating section of a statement of cash flows, which of the following is deducted from net income to compute cash provided by/used by operating activities? Decrease in accounts receivable. Gain on sale of land. Amortization of patent. All of these are deducted from net income to arrive at cash flow from operating activities.arrow_forward
- Which of the following represents an investing activity in the statement of cash flows? a) Sale of plant assets at a loss b) Depreciation of plant assets c) Stock dividend d) Purchase of inventoryarrow_forwardDepreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in a. the Cash flows from financing activities section b. a separate schedule c. the Cash flows from investing activities section d. the Cash flows from operating activities sectionarrow_forwardabout the cash flow problem, confusing.arrow_forward
- Decrease in Accrued Net Cash Provided by (Used for) Operating Activities Cash Flows from Investing Activities: Cash Payment for Acquisition of Plant Assets Net Cash Provided by (Used for) Investing Activities Help me solve this Demodocs example esc Get more help -arrow_forwardWhich of the following will be reflected in the "Cash flows from operating activities" of a Statement of Cash Flows? A) Adjustment for depreciation B) Purchase of equipment C) Increase or decrease in loans D) Purchase of inventoryarrow_forwardWhich of the following statements is true when computing the net cash provided by (used in) operating activities using the Indirect method? Multiple Cholce If the property, plant, and equlpment balance Increases during the perlod, the amount of the Increase is added to net Income. If the prepald expenses balance Increases during the perlod, the amount of the Increase is added to net Income. If the property, plant, and equipment balance Increases during the perlod, the amount of the Increase is subtracted from net Income. If the prepald expenses balance Increases during the perlod, the amount of the Increase is subtracted from net Income.arrow_forward
- Exercises: 1. Indicate under which activity (operating, financing, investing) the following accounts belong in the statement of cash flows: Activity Land Mortgage payable Profit for the year Trade and other payables Depreciation/amortization Inventories Prepaid expenses Buildings Accrued expenses Current taxes payable Equipment Long-term borTowings Purchase of a company Dividendsarrow_forwardThe net income reported on an income statement for the current year was $63,000. Depreciation recorded on fixed assets for the year was $24,000. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below. Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. End Beginning Cash $65,000 $70,000 Accounts receivable (net) 70,000 57,000 Inventories 86,000 102,000 Prepaid expenses 4,000 4,500 Accounts payable (merchandise creditors) 51,000 58,000 Cash dividends payable 4,500 6,500 Salaries payable 6,000 7,500arrow_forwardRECONCILIATION OF NET INCOME TO NET CASH FLOWS FROM OPERATING ACTIVITIES Cash flows from operating activities: Adjustments for noncash effects: Changes in operating assets and liabilities: Net cash flows from operating activitiesarrow_forward
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