Each year, White Mountain Enterprises (WME) prepares a reconciliation schedule that compares its income statement with its statement of cash flows on both the direct and indirect method bases. In its 2024 income statement, WME reported $58,000 for insurance expense. WME paid $72,000 in insurance premiums during 2024. In its reconciliation schedule, WME should show a $14,000: Multiple Choice positive adjustment to net income under the indirect method for the decrease in prepaid insurance. Opositive adjustment to net income under the indirect method for the increase in prepaid insurance. O negative adjustment to net income under the indirect method for the increase in prepaid insurance. negative adjustment to net income under the indirect method for the decrease in prepaid insurance.
Each year, White Mountain Enterprises (WME) prepares a reconciliation schedule that compares its income statement with its statement of cash flows on both the direct and indirect method bases. In its 2024 income statement, WME reported $58,000 for insurance expense. WME paid $72,000 in insurance premiums during 2024. In its reconciliation schedule, WME should show a $14,000: Multiple Choice positive adjustment to net income under the indirect method for the decrease in prepaid insurance. Opositive adjustment to net income under the indirect method for the increase in prepaid insurance. O negative adjustment to net income under the indirect method for the increase in prepaid insurance. negative adjustment to net income under the indirect method for the decrease in prepaid insurance.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Each year, White Mountain Enterprises (WME) prepares a reconciliation schedule that compares its income statement with its
statement of cash flows on both the direct and indirect method bases. In its 2024 income statement, WME reported $58,000 for
insurance expense. WME paid $72,000 in insurance premiums during 2024. In its reconciliation schedule, WME should show a
$14,000:
Multiple Choice
positive adjustment to net income under the indirect method for the decrease in prepaid insurance.
O
positive adjustment to net income under the indirect method for the increase in prepaid insurance..
O negative adjustment to net income under the indirect method for the increase in prepaid insurance.
negative adjustment to net income under the indirect method for the decrease in prepaid insurance.
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