Indicate whether each item should be added to or subtracted from net income to arrive at the net cash flow from operating activities.a.Increase in inventory b.Amortization of discount on investment in bonds c.Decrease in accounts payable d.Amortization of discount on bonds payable e.Increase in salaries payable f.Increase in prepaid expenses g.Subsidiary loss under the equity method h.Gain on disposal of equipment i.Decrease in accounts receivable j.Increase in deferred tax liability

Cash flows from operating activities: It is a section of Statement of cash flow that explains the…

Answered: Indicate whether each item should be…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter14: Statement Of Cash Flows

Section: Chapter Questions

Problem 34E

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Indicate whether each item should be added to or subtracted from net income to arrive at the net cash flow from operating activities.

a.	Increase in inventory
b.	Amortization of discount on investment in bonds
c.	Decrease in accounts payable
d.	Amortization of discount on bonds payable
e.	Increase in salaries payable
f.	Increase in prepaid expenses
g.	Subsidiary loss under the equity method
h.	Gain on disposal of equipment
i.	Decrease in accounts receivable
j.	Increase in deferred tax liability

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