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FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Income statement Revenue $400 COGS 215 Gross Profit 185 Operating expenses Operating income Interest expense 110 75 25 Income before taxes 50 Income tax expense 15 Net income $35 Cash flow from operating activities Net income $35 Plus depreciation expense 70 Operating asset adjustments Less increase in accounts receivable (25) |(50) (5) Less increase in inventories Less increase in prepaid rent Plus increase in accounts payable Plus increase in income tax payable 65 Cash flow from operating activities $95 For each of the following statements, determine whether the statement is true or false. ***Write out "true" or "false"*** 1 Carter collected $375 from customers in the current period. 2 Carter paid $0 interest in the current period. 3 Carter paid $20 in income taxes in the current period. 4 If Carter increased the depreciation expense by $50, it would increase its cash from operations by $50.
Transcribed Image Text:Income statement Revenue $400 COGS 215 Gross Profit 185 Operating expenses Operating income Interest expense 110 75 25 Income before taxes 50 Income tax expense 15 Net income $35 Cash flow from operating activities Net income $35 Plus depreciation expense 70 Operating asset adjustments Less increase in accounts receivable (25) |(50) (5) Less increase in inventories Less increase in prepaid rent Plus increase in accounts payable Plus increase in income tax payable 65 Cash flow from operating activities $95 For each of the following statements, determine whether the statement is true or false. ***Write out "true" or "false"*** 1 Carter collected $375 from customers in the current period. 2 Carter paid $0 interest in the current period. 3 Carter paid $20 in income taxes in the current period. 4 If Carter increased the depreciation expense by $50, it would increase its cash from operations by $50.
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