Cash Flows from (Used for) Operating Activities The income statement disclosed the following items for the year: Depreciation expense $41,700 Gain on disposal of equipment 24,350 Net income 312,200 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,500 Inventory (3,700) Prepaid insurance (1,390) Accounts payable (4,410) Income taxes payable 1,390 Dividends payable 970 Question Content Area 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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: $- Select - Adjustments to reconcile net income to net cash flows from (used for) operating activities: - Select - - Select - Changes in current operating assets and liabilities: - Select - - Select - - Select - - Select - - Select - Net cash flows from operating activities $fill in the blank e488d30baff4f9e_17 Question Content Area b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on of accounting, whereas net income is computed using of accounting.
Cash Flows from (Used for) Operating Activities The income statement disclosed the following items for the year: Depreciation expense $41,700 Gain on disposal of equipment 24,350 Net income 312,200 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,500 Inventory (3,700) Prepaid insurance (1,390) Accounts payable (4,410) Income taxes payable 1,390 Dividends payable 970 Question Content Area 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 outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) Cash flows from (used for) operating activities: $- Select - Adjustments to reconcile net income to net cash flows from (used for) operating activities: - Select - - Select - Changes in current operating assets and liabilities: - Select - - Select - - Select - - Select - - Select - Net cash flows from operating activities $fill in the blank e488d30baff4f9e_17 Question Content Area b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on of accounting, whereas net income is computed using of accounting.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
The income statement disclosed the following items for the year:
| $41,700 | |
| Gain on disposal of equipment | 24,350 |
| Net income | 312,200 |
The changes in the current asset and liability accounts for the year are as follows:
| Increase (Decrease) |
||
| $6,500 | ||
| Inventory | (3,700) | |
| Prepaid insurance | (1,390) | |
| Accounts payable | (4,410) | |
| Income taxes payable | 1,390 | |
| Dividends payable | 970 |
Question Content Area
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 flows from (used for) operating activities: | ||
|
|
$- Select - | |
| Adjustments to reconcile net income to net cash flows from (used for) operating activities: | ||
|
|
- Select - | |
|
|
- Select - | |
| Changes in current operating assets and liabilities: | ||
|
|
- Select - | |
|
|
- Select - | |
|
|
- Select - | |
|
|
- Select - | |
|
|
- Select - | |
| Net cash flows from operating activities | $fill in the blank e488d30baff4f9e_17 |
Question Content Area
b. Why is net cash flows from operating activities different than net income?
Cash flows from operating activities is based on
of accounting, whereas net income is computed using
of accounting.
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