EBK INTRODUCTION TO MANAGERIAL ACCOUNTI
8th Edition
ISBN: 9781260190229
Author: BREWER
Publisher: MCGRAW HILL BOOK COMPANY
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Question
Chapter 13, Problem 5Q
To determine
Cash Flow statement: The statement which summarizes the net amount of cash disbursed and received in a particular activity is called cash flow statement.
Determine the reason for subtracting a gain from an asset in operating activities while preparing cash flow statement by indirect method.
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how can the gain on the sale of invesment be a deduction from net income in determining the cash flow from operating activities?
If an asset is sold at a gain, why is the gain deducted from net income when computing the netcash provided by operating activities under the indirect method?
Depreciation expenses are subtracted from net income using the indirect method to arrive at the cash flow supplied by operations.
Chapter 13 Solutions
EBK INTRODUCTION TO MANAGERIAL ACCOUNTI
Ch. 13.A - Prob. 1ECh. 13.A - Prob. 2ECh. 13.A - Prob. 3ECh. 13.A - Prob. 4ECh. 13.A - Prob. 5PCh. 13.A - Prob. 6PCh. 13.A - Prob. 7PCh. 13 - Prob. 1QCh. 13 - Prob. 2QCh. 13 - Prob. 3Q
Ch. 13 - What general guidelines can you provide for...Ch. 13 - Prob. 5QCh. 13 - Prob. 6QCh. 13 - Prob. 7QCh. 13 - Prob. 8QCh. 13 - A business executive once stated, “Depreciation is...Ch. 13 - If the Accounts Receivable balance increases...Ch. 13 - Would a sale of equipment for cash be considered a...Ch. 13 - Prob. 12QCh. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 2F15Ch. 13 - Prob. 3F15Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 5F15Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 8F15Ch. 13 - Prob. 9F15Ch. 13 - Prob. 10F15Ch. 13 - Prob. 11F15Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Ravenna Company is a merchandiser that uses the...Ch. 13 - Prob. 14F15Ch. 13 - Prob. 15F15Ch. 13 - Prob. 1ECh. 13 - Net Cash Provided by Operating Activities For the...Ch. 13 - Prob. 3ECh. 13 - Prob. 4ECh. 13 - Net Cash Provided by Operating Activities Changes...Ch. 13 - Prepare a Statement of Cash Flows; Free Cash Flow...Ch. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prepare a Statement of Cash Flows; Free Cash...Ch. 13 - Prob. 11PCh. 13 - Prepare a Statement of Cash Flows A comparative...Ch. 13 - Prob. 13PCh. 13 - Prob. 14P
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- If a company reports a gain/(loss) from the sale of assets, as part of the net income on the income statement, and the net book value of those assets on the date of the sale is known, can the amount of the cash proceeds from the sale be determined? If so, how?arrow_forwardExplain why depreciation, depletion, and amortization cost in the operational activities part of the statement of cash flows are added to net income when using the indirect method.arrow_forwardWhy do we exclude depreciation expense and the gain or loss on sale of an asset from the operating activities section of the statement of cash flows under the direct method?arrow_forward
- Explain how depreciation expense is reported in the Statement of Cash Flows using the indirect method. Why is it reported this way?arrow_forwardIn computing net cash flows from operating activities using the indirect method, a gain on the sale of equipment isarrow_forwardExplain why, when utilizing the indirect method, depreciation expenditure, depletion expense, and amortization expense are added to net income in the operational activities part of the statement of cash flows rather of being included in the net income.arrow_forward
- Using the indirect method, depreciation expense is deducted from net income to calculate cash provided by operations.arrow_forwardAs compared to capitalizing a cash expenditure, what is the initial effect on asset turnover of immediately expensing the expenditure, all else equal? Asset turnover is: higher. lower. the same.arrow_forwardJustification for adding depreciation expenditures to net income in the operating activities portion of the cash flow statement, rather than include them in net income when using indirect method.arrow_forward
- The total loss on realization is ______ The amount to be realized from the sale of non-cash assets isarrow_forwardAs compared to capitalizing a cash expenditure, what is the initial effect on asset turnover of immediately expensing the expenditure, all else equal? Asset turnover is:arrow_forwardWhen completing the statement of cash flows using the indirect method, an increase in an asset account would be a corresponding _____ to the net income adjustmentarrow_forward
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