Statement of
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.
Cash flows from operating activities: These are the cash produced by the normal business operations.
The below table shows the way of calculation of cash flows from operating activities:
Cash flows from operating activities (Indirect method) |
Add: Decrease in current assets |
Increase in current liability |
|
Loss on sale of plant assets |
Deduct: Increase in current assets |
Decrease in current liabilities |
Gain on sale of plant assets |
Net cash provided from or used by operating activities |
Table (1)
To Compute: Net cash flows from operating activities under indirect method.
Want to see the full answer?
Check out a sample textbook solutionChapter 14 Solutions
Bundle: Financial & Managerial Accounting, Loose-leaf Version, 13th + CengageNOWv2, 1 term (6 months) Printed Access Card Corporate Financial ... Access Card for Managerial Accounting, 13th
- Adjustments to Net Income-Indirect Method Ripley Corporation's accumulated depreciation-equipment account increased by $15,325 while $3,800 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $22,420 from the sale of investments. Reconcile a net income of $286,900 to net cash flow from operating activities.arrow_forwardAdjustments to Net Income—Indirect Method Omni Corporation's accumulated depreciation—equipment account increased by $8,800, while $5,700 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $6,700 from the sale of investments. Reconcile a net income of $99,600 to net cash flows from operating activities.$fill in the blank 1arrow_forwardAdjustments to Net Income—Indirect Method Ripley Corporation’s accumulated depreciation—equipment account increased by $15,325 while $3,800 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $22,420 from the sale of investments. Reconcile a net income of $286,900 to net cash flow from operating activities.$fill in the blank 1arrow_forward
- Changes in Current Operating Assets and Liabilities-Indirect Method Blue Circle Corporation's comparative balance sheet for current assets and liabilities was as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $25,200 $24,100 Inventory 78,600 79,300 Accounts payable 20,200 18,700 Dividends payable 22,000 23,000 Adjust net income of $105,200 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. $4arrow_forwardAdjustments to Net Income-Indirect Method Kingston Corporation's accumulated depreciation-equipment account increased by $7,600 while $4,900 of patent amortization was balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income st $5,800 from the sale of investments. Reconcile a net income of $86,400 to net cash flow from operating activities.arrow_forwardAdjustments to Net Income-Indirect Method Omni Corporation's accumulated depreciation-equipment account increased by $4,600, while $3,000 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $3,500 from the sale of investments. Reconcile a net income of $51,900 to net cash flows from operating activities.arrow_forward
- Adjustments to Net Income—Indirect Method Omni Corporation's accumulated depreciation—equipment account increased by $4,300 while $2,800 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $3,300 from the sale of investments. Reconcile a net income of $49,200 to net cash flow from operating activities.arrow_forwardAdjustments to Net Income—Indirect Method Lighthouse Corporation's accumulated depreciation equipment account increased by $6,300 while $4,100 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $4,800 from the sale of investments. Reconcile a net income of $71,500 to net cash flow from operating activities.$arrow_forwardOmni Corporation's accumulated depreciation—equipment account increased by $10,100, while $6,500 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $7,700 from the sale of land. Reconcile a net income of $114,600 to net cash flow from operating activities: $________arrow_forward
- Ripley Corporation’s accumulated depreciation—furniture account increased by $7,070, while $2,520 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $5,210 from the sale of land. Reconcile a net income of $109,410 to net cash flow from operating activities. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.arrow_forwardEastlund Corporation's accumulated depreciation—equipment account increased by $6,320, while $2,450 of patent amortization was recognized between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a gain of $13,510 from the sale of investments. Reconcile a net income of $126,300 to net cash flows from operating activities.$fill in the blank 1arrow_forwardRipley corporarion's accumulated depreciation - equipment account increased by 15325 while 3800 of patent amortization was recognized bewtween balance sheet dates. There were no purchases of sales of depreciation or intangible assets during the year. In addition the income statement showed a gain of 22420 from the salem of investments. Reconcile a net income of 286900 to net cash flow from operetatimg activitiesarrow_forward
- Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College PubFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage Learning
- College Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,