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While calculating
a Subtracted from from EBIT(1-t) +(
b Subtracted from EBT.
c Subtracted from EBIT(1-t)
d Subtracted from EBIT.
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- Cash Flow Statement is related to a. AS-1 b. AS-6 c. AS-3 d. AS-12The 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.Distinguish between annual income in the presence of depreciation and annual operating cash flow?
- B4.a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: Net income ✓ Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation expense ✓ ✓ Gain on disposal of equipment ✓ Changes in current operating assets and liabilities: Increase in accounts receivable Decrease in inventory Decrease in prepaid insurance Decrease in accounts payable Increase in income taxes payable Net cash flows from operating activities Feedback 00 00000b. Disregard the assumptions in Part a. What is the depreciable basis? What are the annual depreciation expenses? c. Calculate the annual sales revenues and costs (other than depreciation). Why is it important to include inflation when estimating cash flows? d. Calculate annual net operating profit after sales (NOPAT). Then calculate the operating cash flows.
- The amounts needed to compute a company's working capital come from which of the following financial statements? Select one:a More than one will be needed b. Balance Sheet c Income Statement d None of the optionse Cashflow statementChoose the letter of correct answer: A loss on sale of machinery is presented in a statement of cash flows using indirect method as a. A deduction from net income b. An addition to net income c. An inflow and outflow of cash d. An outflow of cashPlease answer Part B and C. The following are answers from previous questions in case you need the below information. Operating Cash Flow: Operating Cash Flow (OCF)= Net Income + Depreciation – Increase in Working Capital. OCF=419,573+11,751-110,249= 321,075 Net Capital Spending: Net capital expenditures (NCE) = Fixed asset (current period) - Fixed asset (prior period) + depreciation (current period) NCE=258,251-261,779+11,751 =8,223 iii. Change in Net Working Capital Net Working Capital (NWC)= Current assets- current Liabilities Year 2019 : NWC =421,609-148,087 =273,522 Year 2020 : NMW= 550,572-166,801 =383,771 Change in Net Working Capital = 383,771-273,522=110,249 Sl.NO PARTICULARS AMOUNT EBIT + DEPRECIATION - TAXES = 597976+11751-178055= $ 431,672 ii] NET CAPITAL SPENDING: ENDING NET FIXED ASSETS - BEGINNING NET FIXED ASSETS + DEPRECIATION = 258251-261779+11751= $ 8223 iii] CHANGE IN NET WORKING…
- Which of the following sections of the statement of cash flows include activities that increase and decrease long-term assets? the investing activities section Should not be reported on cash flow statement OO the financing activities section the operating activities sectionUnder the indirect method, depreciation expense is addedto net income to report cash flows from operating activities. Does depreciation cause an inflow of cash?If all values carry a + sign, cash flow before taxes is represented by the following equation:a. gross income - expenses - depreciation - initial investment + salvage valueb. gross income - expenses - depreciation + salvage valuec. gross income - expenses - initial investment + salvage valued. gross income - expenses + initial investment + salvage value
