AoA Company reported the following for its most recent fiscal year: Net income, - $20,000; Depreciation expense – $5,000; Increase in accounts receivable – $1,000; Decrease in merchandise inventory -$200; Increase in prepaid expenses – $100; Decrease in accounts payable – $900; Increase in wages payable – $300; Decrease in bonds payable – $500; Loss on sale of machinery – $100. What is the net cash flows from Operating Activities?

AoA Company reported the following for its most recent fiscal year: Net income, - $20,000; Depreciation expense – $5,000; Increase in accounts receivable – $1,000; Decrease in merchandise inventory -$200; Increase in prepaid expenses – $100; Decrease in accounts payable – $900; Increase in wages payable – $300; Decrease in bonds payable – $500; Loss on sale of machinery – $100. What is the net cash flows from Operating Activities?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter21: The Statement Of Cash Flows

Section: Chapter Questions

Problem 5MC

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Question

AoA Company reported the following for its most recent fiscal year:

Net income, - $20,000;

Depreciation expense – $5,000;

Increase in accounts receivable – $1,000;

Decrease in merchandise inventory -$200;

Increase in prepaid expenses – $100;

Decrease in accounts payable – $900;

Increase in wages payable – $300;

Decrease in bonds payable – $500;

Loss on sale of machinery – $100.

What is the net cash flows from Operating Activities?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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