FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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- Atkins Corporation has provided the following information for the year ended December 31, 2019:• The equipment account balance increased $200,000.• The equipment accumulated depreciation account increased $35,000.• Equipment costing $50,000 was sold during the year resulting in a $10,000 gain.• Depreciation expense on the equipment recorded during the year was $65,000. Which of the following statements is incorrect with respect to preparation of the statement of cash flows? Assume that the equipment purchase and sale resulted in cash flows. A. A $60,000 cash inflow is reported from the equipment sale. B. Using the indirect method, net income is increased by the $65,000 depreciation expense. C. Using the indirect method, net income is decreased by the $10,000 gain on the sale of the equipment. D. A $30,000 cash inflow is reported from the equipment sale.arrow_forwardHampton Industries had $68,000 in cash at year-end 2020 and $16,000 in cash at year-end 2021. The firm invested in property, plant, and equipment totaling $170,000 - the majority having a useful life greater than 20 years and falling under the alternative depreciation system. Cash flow from financing activities totaled +$100,000. Round your answers to the nearest dollar, if necessary. a. What was the cash flow from operating activities? Cash outflow, if any, should be indicated by a minus sign. b. If accruals increased by $35,000, receivables and inventories increased by $195,000, and depreciation and amortization totaled $13,000, what was the firm's net income?arrow_forwardFinance is Fun, Inc recently reported net income of $4.2 million, depreciation of $750,000, and amortization of $100,000. What was its net cash flow?arrow_forward
- Sweeter Enterprises Inc. has net cash flows from operating activities of $378,000. Cash flows used for investments in property, plant, and equipment totaled $76,000, of which 65% of this investment was used to replace existing capacity. a. Determine the free cash flow for Sweeter Enterprises Inc. b. How might a lender use free cash flow to determine whether or not to give Sweeter Enterprises Inc. a loan? Free cash flow is often used to measure the financial strength of a business. The - free cash flow that a business has, the easier it will be for the company to pay the interest on the loan and repay the loan principal. Sweeter's free cash flow is $ which is veryarrow_forwardReview the CFLO from operations for Q1 2022 for GE (link below) and answer the following: Make sure you expand the cashflow from continuing operations link to see the details. https://finance.yahoo.com/quote/GE/cash-flow?p=GE (Links to an external site.) 4. Why is depreciation added back in the statement of cashlfow?arrow_forwardUse the following company information to calculate net cash provided or used by investing activities. (a) Long-term investments were sold for $51,000 cash, yielding a gain of $22,150. (b) Paid $72,000 cash for new machinery. (c) Sold land costing $34,000 for $40,000 cash, yielding a $6,000 gain. (d) Equipment with a book value of $195,000 and an original cost of $320,000 was sold at a loss of $27,000. Statement of Cash Flows (partial) Cash flows from investing activitiesarrow_forward
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