Answered: $22,000 Decrease in accounts receivable…

$22,000 Decrease in accounts receivable Increase in inventories 9,200 Increase prepaid expenses Increase in salaries payable Decrease in income taxes payable 8,500 10,000 14,000

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 8BE

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Question

Cemptex Corporation prepares its statement of cash flows using the indirect method to report operating activities. Net income for the 2016 fiscal year was $624,000. Depreciation and amortization expense of $87,000 was included with operating expenses in the income statement. The following information describes the changes in current assets and liabilities other than cash: Required: Prepare the operating activities section of the 2016 statement of cash flows.

$22,000
Decrease in accounts receivable
Increase in inventories
9,200
Increase prepaid expenses
Increase in salaries payable
Decrease in income taxes payable
8,500
10,000
14,000

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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