Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company. Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities . Deduct increase in current assets. Deduct decrease in current liabilities. Add decrease in current assets. Add the increase in current liability. Add depreciation expense and amortization expense. Add loss on sale of plant assets. Less gain on sale of plant assets. To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

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Answer 1

Question

Chapter 12, Problem 12.5AP

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

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Answer 2

Question

Chapter 12, Problem 12.5AP

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

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Answer 3

Question

Chapter 12, Problem 12.5AP

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

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Answer 4

Question

Chapter 12, Problem 12.5AP

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

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Answer 5

Chapter 12, Problem 12.5AP

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

Answer 6

Chapter 12, Problem 12.5AP

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

Answer 7

Chapter 12, Problem 12.5AP

To determine

Cash flows from operating activities: These refer to the cash received or cash paid in day-to-day operating activities of a company.

Indirect method: Under this method, the following amounts are to be adjusted from the Net Income to calculate the net cash provided from operating activities.

Deduct increase in current assets.

Deduct decrease in current liabilities.

Add decrease in current assets.

Add the increase in current liability.

Add depreciation expense and amortization expense.

Add loss on sale of plant assets.

Less gain on sale of plant assets.

To Prepare: Operating activities section of statement of cash flows for the year ended December 31, 2017 under indirect method.

Answer 8

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Answer 11

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - Prob. 4Q Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Why is it necessary to use comparative balance...Ch. 12 - Prob. 8Q Ch. 12 - Prob. 9Q Ch. 12 - Prob. 10Q

Solution Summary: The author explains how depreciation is a non-cash expense that reduces the net income. The company eliminates all gains and losses from investing activities to arrive net cash from operating activities.

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