ABC Corporation reported a net loss of $(115,000) for the year 2020. Over the course of that year, certain balance sheet accounts changed as follows: • Decrease in accounts receivable: $22,000 • Decrease in accounts payable: $18,600 • Increase in inventory: $14,800 • Increase in wages payable: $30,000 • Increase in common stock: $150,000 • Increase in net PP&E: $75,000 The depreciation expense was $46,000 for the year 2020. In addition, net income included a loss of $5,600 from selling used equipment. Indicate how each item should be reported in preparing Cash flows from operating activities using the indirect method. v Depreciation A. Add to net income v Loss from selling used equipment B. No effect C. Subtract from net income v Decrease in accounts receivable v Increase in inventory v Increase in wages payable v Decrease in accounts payable Increase in common stock

ABC Corporation reported a net loss of $(115,000) for the year 2020. Over the course of that year, certain balance sheet accounts changed as follows: • Decrease in accounts receivable: $22,000 • Decrease in accounts payable: $18,600 • Increase in inventory: $14,800 • Increase in wages payable: $30,000 • Increase in common stock: $150,000 • Increase in net PP&E: $75,000 The depreciation expense was $46,000 for the year 2020. In addition, net income included a loss of $5,600 from selling used equipment. Indicate how each item should be reported in preparing Cash flows from operating activities using the indirect method. v Depreciation A. Add to net income v Loss from selling used equipment B. No effect C. Subtract from net income v Decrease in accounts receivable v Increase in inventory v Increase in wages payable v Decrease in accounts payable Increase in common stock

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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tyson Company's working capital accounts at December 31, 2018, are given below: Current Assets: Cash $100,000 Marketable Securities 50,000 Accounts Receivable $250,000 Less Allowance for Doubtful Accounts (20,000) 230,000 Inventory, Lifo 300,000 Prepaid 8,000 Total Current Assets $688,000 Current Liabilities: Accounts Payable $200,000 Notes Payable 50,000 Taxes Payable 10,000 Accrued Liabilities 30,000 Total Current Liabilities $290,000 During 2019, DeCort Company completed the following transactions: a. Purchased fixed assets for cash, $20,000. b. Exchanged DeCort Company common stock for land. Estimated value of transaction, $80,000. c. Payment of $40,000 on short-term notes payable. d. Sold marketable securities costing $20,000 for $25,000 cash. e.…
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