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

7

Any gain or loss from the sale of equipment is reported in the operating activities section of the statement of cash flows. True False

The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods. Some elements necessary to complete the schedule are missing. Required: Complete the schedule by determining each of the following missing elements: (Amounts to be deducted should be indicated with a minus sign.) Income Statement Sales Gain on sale of equipment Cost of goods sold Salaries expense Depreciation expense Interest expense Insurance expense Loss on sale of land Income tax expense Net Income Cash flows from Operating Activities Indirect Method Net income Adjustments: $432 Decrease in accounts receivable 36 Gain on sale of equipment Increase in inventory Increase in accounts payable (66) (21) Depreciation expense Decrease in bond discount (45) Decrease in prepaid insurance (18) Loss on sale of land (51) Increase in income tax payable Net cash flows from operating activities Direct Method 18 Cash received from customers (36) (Not…