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) Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable Dividends payable $57,600 33,600 508,000 $8,960 (5,120) (1,920) (6,080) 1,410 2,200 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) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on Amount Amount 00000000 of accounting, whereas net income is computed using) of accounting.

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) Accounts receivable Inventory Prepaid insurance Accounts payable Income taxes payable Dividends payable $57,600 33,600 508,000 $8,960 (5,120) (1,920) (6,080) 1,410 2,200 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) operating activities: Adjustments to reconcile net income to net cash flows from (used for) operating activities: Changes in current operating assets and liabilities: b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on Amount Amount 00000000 of accounting, whereas net income is computed using) of accounting.

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Description: Cash flows from (used for) operating activities-indirect methodThe income statement disclosed the following items for the year:Depreciation expenseGain on disposal of equipmentNet incomeThe changes in the current asset and liability accounts for the

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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