Cash flows from (used for) operating activities-indirect method The income statement disclosed the following items for the year: Depreciation expense Gain on disposal of equipment Net income The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) $6,490 (3,690) (1,380) (4,400) 1,380 970 Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable Dividends payable $41,600 24,290 343,900 a. 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 in flows, cash payments, decreases in cash, or any negative adjustments. Line Item Description Statement of Cash Flows (partial) tingactivities Amount Amount

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Chapter1: Financial Statements And Business Decisions
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Cash flows from (used for) operating activities-indirect method
The income statement disclosed the following items for the year:
Depreciation expense
Gain on disposal of equipment
Net income
The changes in the current asset and liability accounts for the year are as follows:
Increase (Decrease)
$41,600
24,290
343,900
Accounts receivable
Inventory
Prepaid insurance
Accounts payable
Income taxes payable.
Dividends payable
$6,490
(3,690)
(1,380)
(4,400)
1,380
970
a. 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 out
flows, cash payments, decreases in cash, or any negative adjustments.
Statement of Cash Flows (partial)
Line Item Description
Cash flows from (used for) operatingactivities:
Adjustments to reconcile net incometo net cash flows from (used for) operating activities:
Amount Amount
Transcribed Image Text:Cash flows from (used for) operating activities-indirect method The income statement disclosed the following items for the year: Depreciation expense Gain on disposal of equipment Net income The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) $41,600 24,290 343,900 Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable. Dividends payable $6,490 (3,690) (1,380) (4,400) 1,380 970 a. 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 out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Line Item Description Cash flows from (used for) operatingactivities: Adjustments to reconcile net incometo net cash flows from (used for) operating activities: Amount Amount
a. 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 out
flows, cash payments, decreases in cash, or any negative adjustments.
Statement of Cash Flows (partial)
Line Item Description
Cash flows from (used for) operatingactivities:
Adjustments to reconcile net incometo net cash flows from (used for) operating activities:
Changes in current operating assetsand liabilities:
b. Why is net cash flows from operating activities different than net income?
Cash flows from operating activities is based on)
Amount Amount
0000000
of accounting, whereas net income is computed using
of accounting.
Transcribed Image Text:a. 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 out flows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Line Item Description Cash flows from (used for) operatingactivities: Adjustments to reconcile net incometo net cash flows from (used for) operating activities: Changes in current operating assetsand liabilities: b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on) Amount Amount 0000000 of accounting, whereas net income is computed using of accounting.
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