Krakow Corporation reported 2010 net income of $450,000, including the effects of depreciationexpense of $60,000, and amortization expense on a patent of $10,000. Also, cash of $50,000 wasborrowed on a 5-year note payable. Based on this data, total cash inflow from operating activities usingthe indirect method for 2010 was:$570,000$520,000$470.000$440,000 Problem 1Krakow Corporation reported 2010 net income of $450,000, including the effects of depreciationexpense of $60,000, and amortization expense on a patent of $10,000. Also, cash of $50,000 wasborrowed on a 5-year note payable. Based on this data, total cash inflow from operating activities usingthe indirect method for 2010 was:a. $570,000b. $520,000c. $470,000,d. $440,000

Answered: expense of $60,000, and amortization…

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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Krakow Corporation reported 2010 net income of $450,000, including the effects of depreciation
expense of $60,000, and amortization expense on a patent of $10,000. Also, cash of $50,000 was
borrowed on a 5-year note payable. Based on this data, total cash inflow from operating activities using
the indirect method for 2010 was:

$570,000
$520,000
$470.000
$440,000

Problem 1
Krakow Corporation reported 2010 net income of $450,000, including the effects of depreciation
expense of $60,000, and amortization expense on a patent of $10,000. Also, cash of $50,000 was
borrowed on a 5-year note payable. Based on this data, total cash inflow from operating activities using
the indirect method for 2010 was:
a. $570,000
b. $520,000
c. $470,000,
d. $440,000

Expert Solution

Step 1: Define Cash Flow Statement -

Statement of cash flow is a financial statement that includes inflow and outflow of cash takes place during the financial year. This statement includes three significant activities which are operating, investing and financing.

The result of the statement will provide increase or decrease in cash.

This statement shows the actual sources and usage of cash.