Cash Flows from Operating Activities—Indirect Method The income statement disclosed the following items for the year: Depreciation expense $41,500 Gain on disposal of equipment 24,210 Net income 333,400 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,460 Inventory (3,680) Prepaid insurance (1,380) Accounts payable (4,380) Income taxes payable 1,380 Dividends payable 970 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) For the year ended Dec. 31, -- Cash flows from operating activities: $fill in the blank 097d5805b023ff8_2 Adjustments to reconcile net income to net cash flow from operating activities: fill in the blank 097d5805b023ff8_4 fill in the blank 097d5805b023ff8_6 Changes in current operating assets and liabilities: fill in the blank 097d5805b023ff8_8 fill in the blank 097d5805b023ff8_10 fill in the blank 097d5805b023ff8_12 fill in the blank 097d5805b023ff8_14 fill in the blank 097d5805b023ff8_16 Net cash flow from operating activities $fill in the blank 097d5805b023ff8_17 b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on of accounting, whereas net income is computed using of accounting.
Cash Flows from Operating Activities—Indirect Method The income statement disclosed the following items for the year: Depreciation expense $41,500 Gain on disposal of equipment 24,210 Net income 333,400 The changes in the current asset and liability accounts for the year are as follows: Increase (Decrease) Accounts receivable $6,460 Inventory (3,680) Prepaid insurance (1,380) Accounts payable (4,380) Income taxes payable 1,380 Dividends payable 970 a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Statement of Cash Flows (partial) For the year ended Dec. 31, -- Cash flows from operating activities: $fill in the blank 097d5805b023ff8_2 Adjustments to reconcile net income to net cash flow from operating activities: fill in the blank 097d5805b023ff8_4 fill in the blank 097d5805b023ff8_6 Changes in current operating assets and liabilities: fill in the blank 097d5805b023ff8_8 fill in the blank 097d5805b023ff8_10 fill in the blank 097d5805b023ff8_12 fill in the blank 097d5805b023ff8_14 fill in the blank 097d5805b023ff8_16 Net cash flow from operating activities $fill in the blank 097d5805b023ff8_17 b. Why is net cash flows from operating activities different than net income? Cash flows from operating activities is based on of accounting, whereas net income is computed using of accounting.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 6E
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Question
Cash Flows from Operating Activities—Indirect Method
The income statement disclosed the following items for the year:
$41,500 | |
Gain on disposal of equipment | 24,210 |
Net income | 333,400 |
The changes in the current asset and liability accounts for the year are as follows:
Increase (Decrease) | ||
$6,460 | ||
Inventory | (3,680) | |
Prepaid insurance | (1,380) | |
Accounts payable | (4,380) | |
Income taxes payable | 1,380 | |
Dividends payable | 970 |
a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Use the minus sign to indicate
Statement of Cash Flows (partial) | ||
For the year ended Dec. 31, -- | ||
Cash flows from operating activities: | ||
$fill in the blank 097d5805b023ff8_2 | ||
Adjustments to reconcile net income to net cash flow from operating activities: | ||
fill in the blank 097d5805b023ff8_4 | ||
fill in the blank 097d5805b023ff8_6 | ||
Changes in current operating assets and liabilities: | ||
fill in the blank 097d5805b023ff8_8 | ||
fill in the blank 097d5805b023ff8_10 | ||
fill in the blank 097d5805b023ff8_12 | ||
fill in the blank 097d5805b023ff8_14 | ||
fill in the blank 097d5805b023ff8_16 | ||
Net cash flow from operating activities | $fill in the blank 097d5805b023ff8_17 |
b. Why is net cash flows from operating activities different than net income?
Cash flows from operating activities is based on of accounting, whereas net income is computed using of accounting.
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