Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

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Chapter 12, Problem 8Q

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Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

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Patrick Lewis Manufacturing Ltd. has been using an overhead rate of Rs.8.20 per machine hour. During the year, overheads of Rs. 310,000 were incurred, and 50,000 machine hours were worked. Therefore, overheads were: A. Under-applied by Rs. 100,000 B. Over-applied by Rs. 70,400 C. Under-applied by Rs. 70,400. Over-applied by Rs. 100,000

At the beginning of a year, a manufacturing company predicts total direct materials costs of $920,000 and total overhead costs of $1,100,000. If the company uses direct materials costs as its activity base to allocate overhead, what is the predetermined overhead rate it should use during the year?

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Chapter 12, Problem 8Q

To determine

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

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Answer 3

Question

Chapter 12, Problem 8Q

To determine

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

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Answer 4

Question

Chapter 12, Problem 8Q

To determine

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

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Answer 5

Chapter 12, Problem 8Q

To determine

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

Answer 6

Chapter 12, Problem 8Q

To determine

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

Answer 7

Chapter 12, Problem 8Q

To determine

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

Answer 8

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Answer 9

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Answer 11

Ch. 12 - Prob. 1Q Ch. 12 - Prob. 2Q Ch. 12 - Prob. 3Q Ch. 12 - What are the major categories of business...Ch. 12 - Prob. 5Q Ch. 12 - Prob. 6Q Ch. 12 - Prob. 7Q Ch. 12 - Prob. 8Q Ch. 12 - Compare the two methods of reporting cash flows...Ch. 12 - Prob. 10Q

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

Solution Summary: The author explains that an increase in inventory of 50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

Explain the reason behind that an increase in inventory of $50,000 during the year must be included in computing cash flows from operating activities under both the direct and indirect methods.

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Chapter 12 Solutions