Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN: 9781337115773
Author: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher: Cengage Learning
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Textbook Question
Chapter 14, Problem 11MCQ
The gain on sale of equipment is deducted from net income to arrive at operating
- a. the sale of long-term assets is an operating activity.
- b. the gain reveals the total cash received.
- c. all of the cash received from the sale is reported in the operating section.
- d. All of these.
- e. None of these.
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Which of the following should be subtracted from net income in computing net cash flows from operating activities using the indirect method?
a.A decrease in accounts receivable
b.A loss on a sale of equipment
c.An increase in accounts payable
d.A gain on a sale of equipment
Which of the following will NOT appear in the cash flows from operating activities?
Select one:
a. Decrease in Inventory
b. Depreciation Expense
c. Increase in Accounts Payable
d. Gain on Sale of Equipment
e. All of the above would appear in the Operating Section.
Non-cash charges that are added back to profit in determining cash provided by operations under the indirect method do not include:a. depreciation expense.b. an increase in inventory.c. amortisation expense.d. loss on sale of equipment.
Chapter 14 Solutions
Managerial Accounting: The Cornerstone of Business Decision-Making
Ch. 14 - Prob. 1DQCh. 14 - Prob. 2DQCh. 14 - Of the three categories on the statement of cash...Ch. 14 - Prob. 4DQCh. 14 - Why is it better to report the noncash investing...Ch. 14 - Prob. 6DQCh. 14 - Prob. 7DQCh. 14 - Explain how a company can report a loss and still...Ch. 14 - In computing the periods net operating cash flows,...Ch. 14 - Prob. 10DQ
Ch. 14 - In computing the periods net operating cash flows,...Ch. 14 - Explain the reasoning for including the payment of...Ch. 14 - What are the advantages in using worksheets when...Ch. 14 - Prob. 14DQCh. 14 - Cash inflows from operating activities come from...Ch. 14 - Prob. 2MCQCh. 14 - Prob. 3MCQCh. 14 - Sources of cash include a. profitable operations....Ch. 14 - Uses of cash include a. cash dividends. b. the...Ch. 14 - Prob. 6MCQCh. 14 - Prob. 7MCQCh. 14 - Which of the following adjustments to net income...Ch. 14 - An increase in accounts receivable is deducted...Ch. 14 - An increase in inventories is deducted from net...Ch. 14 - The gain on sale of equipment is deducted from net...Ch. 14 - Which of the following is an investing activity?...Ch. 14 - Which of the following is a financing activity? a....Ch. 14 - Prob. 14MCQCh. 14 - A worksheet approach to preparing the statement of...Ch. 14 - In a completed worksheet, a. the debit column...Ch. 14 - Prob. 17BEACh. 14 - Prob. 18BEACh. 14 - Prob. 19BEACh. 14 - Prob. 20BEACh. 14 - Swasey Company earned net income of 1,800,000 in...Ch. 14 - Prob. 22BEACh. 14 - Prob. 23BEACh. 14 - During 20X2, Norton Company had the following...Ch. 14 - Prob. 25BEBCh. 14 - Prob. 26BEBCh. 14 - Roberts Company provided the following partial...Ch. 14 - Prob. 28BEBCh. 14 - Prob. 29BEBCh. 14 - Prob. 30BEBCh. 14 - Prob. 31BEBCh. 14 - During 20X2, Evans Company had the following...Ch. 14 - Stillwater Designs is a private company and...Ch. 14 - Prob. 34ECh. 14 - Jarem Company showed 189,000 in prepaid rent on...Ch. 14 - During the year, Hepworth Company earned a net...Ch. 14 - During 20X1, Craig Company had the following...Ch. 14 - Tidwell Company experienced the following during...Ch. 14 - Prob. 39ECh. 14 - Oliver Company provided the following information...Ch. 14 - Prob. 41ECh. 14 - Prob. 42ECh. 14 - Prob. 43ECh. 14 - Solpoder Corporation has the following comparative...Ch. 14 - Solpoder Corporation has the following comparative...Ch. 14 - The following financial statements were provided...Ch. 14 - Prob. 47PCh. 14 - Prob. 48PCh. 14 - Booth Manufacturing has provided the following...Ch. 14 - The following balance sheets and income statement...Ch. 14 - The following balance sheets and income statement...Ch. 14 - Balance sheets for Brierwold Corporation follow:...Ch. 14 - Balance sheets for Brierwold Corporation follow:...Ch. 14 - Prob. 54PCh. 14 - Prob. 55PCh. 14 - The following balance sheets were taken from the...Ch. 14 - The following balance sheets were taken from the...Ch. 14 - The comparative balance sheets and income...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- If a company reports a gain/(loss) from the sale of assets, as part of the net income on the income statement, and the net book value of those assets on the date of the sale is known, can the amount of the cash proceeds from the sale be determined? If so, how?arrow_forwardWhich of the following would be classified as a cash outflow from an operating activity? a. Purchase of an investment b. Payment of dividends c. Purchase of equipment d. Payment of goods purchased from suppliersarrow_forwardIn the statement of cash flows using indirect method, depreciation is treated as an adjustment to reported profit because depreciation   a. reduces the reported profit and involves an outflow of cash. b. reduces the reported profit but does not involves an outflow of cash. c. is an outflow of cash for asset replacement d. represent a significant portion of operating expensearrow_forward
- Choose 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 casharrow_forwardWhich of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?  a. a loss on the sale of equipment  b. gain on sale of land  c. depreciation expense  d. dividends declared and paidarrow_forwardWhich of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? a.dividends declared and paid b.depreciation expense c.a gain on the sale of equipment d.an increase in inventoryarrow_forward
- Which of the following would be subtracted from net income when using the indirect method to derive net cash from operating activities? a. Decrease in accounts payable b. Loss on sale of investments c. Decrease in accounts receivable d. Depreciation expensearrow_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_forwarda. 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 âś“ Adjustments to reconcile net income to net cash flows from (used for) operating activities: Depreciation expense âś“ âś“ Gain on disposal of equipment âś“ 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 00000arrow_forward
- Which of the following activity will NOT show up on cash flow from operating activities? O Purchase of an asset O Interest payments O Receipts from sales of goods and services O Income tax payments. O Payments made to supplier of goods and services used in production.arrow_forwardHow is a decrease in current liabilities handled? A. It is subtracted from current assets in the cash flows from financing activities section B. It is added to inventory purchases in the cash flows from investing activities section C. It is subtracted from net income in the cash flows from operating activities section. D. It is added to net income in the cash flows from operating activities section.arrow_forwardIn the calculation of cash from operating activities, depreciation is added back because it is: A. not allowable for taxation purposesB. a cash inflowC. a financing activityD. a non-cash expensearrow_forward
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