Under the indirect method, how much should be reported as cash flows from operating activities? a. P 780,000b. P 550,000c. P 600,000d. P 750,000 Sun company provided the following data for the preparation of the statementof cash flows for the current year> Increase in accounts receivable> Decrease in income tax payable> Depreciation> Net income> Gain on sale of equipment> Loss on sale of buildingP300,000170,0001,000,000250,000440,000210,000

Answered: Under the indirect method, how much…

Under the indirect method, how much should be reported as cash flows from operating activities? a. P 780,000 b. P 550,000 c. P 600,000 d. P 750,000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter15: Statement Of Cash Flows

Section: Chapter Questions

Problem 19E

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Question

Under the indirect method, how much should be reported as cash flows from operating activities?

a. P 780,000
b. P 550,000
c. P 600,000
d. P 750,000

Sun company provided the following data for the preparation of the statement
of cash flows for the current year
> Increase in accounts receivable
> Decrease in income tax payable
> Depreciation
> Net income
> Gain on sale of equipment
> Loss on sale of building
P
300,000
170,000
1,000,000
250,000
440,000
210,000

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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