A company has the following information for the year: Net income: $150,000 ⚫ Depreciation expense: $25,000 • Increase in inventory: $10,000 ⚫ Decrease in accounts payable: $5,000 ⚫ Purchase of equipment: $40,000 What is the company's cash flow from operating activities using the indirect method?

A company has the following information for the year: Net income: $150,000 ⚫ Depreciation expense: $25,000 • Increase in inventory: $10,000 ⚫ Decrease in accounts payable: $5,000 ⚫ Purchase of equipment: $40,000 What is the company's cash flow from operating activities using the indirect method?

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter11: The Statement Of Cash Flows

Section: Chapter Questions

Problem 8MCQ: Which item is added to net income when computing cash flows from operating activities? a. Gain on...

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Which item is added to net income when computing cash flows from operating activities? a. Gain on the disposal of property, plant, and equipment b. Increase in wages payable c. Increase in inventory d. Increase in prepaid rent Use the following information for Multiple-Choice Questions 11-9 and 11-10: Cornett Company reported the following information: cash received from the issuance of common stock, $150,000; cash received from the sale of equipment, $14,800; cash paid to purchase an investment, $20,000; cash paid to retire a note payable, $50,000; and cash collected from sales to customers, $225,000.
In the current year, Harrisburg Corporation had net income of 35,000, a 9,000 decrease in accounts receivable, a 7,000 increase in inventory, an 8,000 increase in salaries payable, a 13,000 decrease in accounts payable, and 10,000 in depreciation expense. Using the indirect method, prepare the operating activities section of its statement of cash flows based on this information.
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Fitz Company reports the following information. Use the indirect method to prepare the operating activi- ties section of its statement of cash flows for the year ended December 31. Selected Annual Income Statement Data Net income .. Depreciation expense Amortization expense.. Gain on sale of plant assets. Selected Year-End Balance Sheet Data $374,000 44,000 Accounts receivable decrease.. $17,100 Inventory decrease..... Prepaid expenses increase.. Accounts payable decrease Salaries payable increase.. 42,000 7,200 4,700 6,000 8,200 1,200
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The following information is available from the current period financial statements: Net income $112,044 Depreciation expense 22,976 Increase in accounts receivable 14,959 Decrease in accounts payable 16,749 The net cash flow from operating activities using the indirect method is:
What is the Required, otherwise meaning: the Operating Activities section of the Cash Flow Statement using the INDIRECT METHOD?
Using the Exhibit below, assume that the amount of Net Income on the Income Statement for the year was $100,000. When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of net income on the Cash flow from operating activities section? EXHIBIT Increase (Decrease) Net Income (loss) $XXX Adjustments to reconcile net income to net cash flow from operating activities: Depreciation of fixed assets XXX Losses on disposal of assets XXX Gains on disposal of assets (XXX) Changes in current operating assets and liabilities:…