Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 16, Problem 4E
To determine
Indicate whether each of the given items would be added or deducted from net income in determining net cash flow from operating activities (indirect method).
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Students have asked these similar questions
Which of the following should be deducted from net income in computing net cash flows from operating activities using the indirect method?
a.a decrease in accounts receivable
b.preferred dividends declared and paid
c.a decrease in accounts payable
d.a decrease in inventory
Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?
a.a decrease in accounts payable
b.an increase in inventory
c.preferred dividends declared and paid
d.a decrease in accounts receivable
Which of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method?
a) Decrease in accounts payable
b) Depreciation expense
c) Amortization expense
d) Decrease in accounts receivable
Chapter 16 Solutions
Financial Accounting
Ch. 16 - Prob. 1DQCh. 16 - Prob. 2DQCh. 16 - A corporation issued 2,000,000 of common stock in...Ch. 16 - A retail business, using the accrual method of...Ch. 16 - If salaries payable was 100,000 at the beginning...Ch. 16 - Prob. 6DQCh. 16 - A corporation issued 2,000,000 of 20-year bonds...Ch. 16 - Fully depreciated equipment costing 50,000 is...Ch. 16 - Prob. 9DQCh. 16 - Prob. 10DQ
Ch. 16 - Prob. 1PEACh. 16 - Prob. 1PEBCh. 16 - Pearl Corporations accumulated...Ch. 16 - Ya Wen Corporations accumulated...Ch. 16 - Alpenrose Corporations comparative balance sheet...Ch. 16 - Prob. 3PEBCh. 16 - Prob. 4PEACh. 16 - Staley Inc. reported the following data: Prepare...Ch. 16 - Prob. 5PEACh. 16 - IZ Corporation purchased land for 400,000. Later...Ch. 16 - Prob. 6PEACh. 16 - Prob. 6PEBCh. 16 - The cost of merchandise sold reported on the...Ch. 16 - The cost of merchandise sold reported on the...Ch. 16 - Prob. 8PEACh. 16 - Prob. 8PEBCh. 16 - Prob. 1ECh. 16 - State the effect (cash receipt or payment and...Ch. 16 - Prob. 3ECh. 16 - Prob. 4ECh. 16 - Prob. 5ECh. 16 - The net income reported on the income statement...Ch. 16 - Prob. 7ECh. 16 - The board of directors declared cash dividends...Ch. 16 - An analysis of the general ledger accounts...Ch. 16 - An analysis of the general ledger accounts...Ch. 16 - On the basis of the details of the following fixed...Ch. 16 - On the basis of the following stockholders equity...Ch. 16 - Prob. 13ECh. 16 - Prob. 14ECh. 16 - Prob. 15ECh. 16 - Prob. 16ECh. 16 - The comparative balance sheet of Pelican Joe...Ch. 16 - List the errors you find in the following...Ch. 16 - Prob. 19ECh. 16 - Prob. 20ECh. 16 - Prob. 21ECh. 16 - The income statement of Booker T Industries Inc....Ch. 16 - The income statement for Rhino Company for the...Ch. 16 - Prob. 24ECh. 16 - The financial statements for Nike, Inc., are...Ch. 16 - Lovato Motors Inc. has cash flows from operating...Ch. 16 - The comparative balance sheet of Cromme Inc. for...Ch. 16 - The comparative balance sheet of Del Ray...Ch. 16 - The comparative balance sheet of Whitman Co. at...Ch. 16 - The comparative balance sheet of Canace Products...Ch. 16 - Prob. 5PACh. 16 - Prob. 1PBCh. 16 - The comparative balance sheet of Harris Industries...Ch. 16 - Prob. 3PBCh. 16 - The comparative balance sheet of Martinez Inc. for...Ch. 16 - The comparative balance sheet of Merrick Equipment...Ch. 16 - Lucas Hunter, president of Simmons Industries...Ch. 16 - Prob. 2CPCh. 16 - Prob. 3CPCh. 16 - The Commercial Division of Tidewater Inc. provided...
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- Which of the following adjustments would NOT be made to net income when computing cash from operating activities? a.add an increase in Accrued Interest Payable b.deduct the purchase of store equipment c.add the reduction in Accounts Receivable d.add the decrease in Merchandise Inventoryarrow_forwardIndicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: a. Increase in prepaid expenses b. Amortization of patents c. Increase in salaries payable d. Gain on sale of fixed assets e. Decrease in accounts receivable f. Increase in notes receivable due in 60 days g. Amortization of discount on bonds payable h. Decrease in merchandise inventory i. Depreciation of fixed assets j. Loss on retirement of long-term debt k. Decrease in accounts payable l. Increase in notes payable due in 30 days m. Increase in income taxes payablearrow_forwardCash Flows from Operating Activities—Indirect Method Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: a. Decrease in inventory b. Increase in accounts receivable c. Increase in accounts payable d. Loss on retirement of long-term debt e. Depreciation of fixed assets f. Decrease in notes receivable due in 60 days from customers g. Increase in salaries payable h. Decrease in prepaid expenses i. Amortization of patent j. Increase in notes payable due in 120 days to vendors k. Gain on disposal of fixed assetsarrow_forward
- Which of the following would be subtracted from net income when using the indirect method to derive net cash from operating activities? a. Decrease in accounts payable b. Loss on sale of investments c. Decrease in accounts receivable d. Depreciation expensearrow_forwardWhich of the following is used in computing cash received from customers using the direct method? a.An increase in inventory b.A decrease in accounts receivable c.A decrease in inventory d.An increase in accounts payablearrow_forwardWhich of the following should be added to net income in calculating net cash flow from operating activities using the INDIRECT method? A. A decrease in accounts payable. B. A decrease in accounts receivable. C. Preferred dividends declared and paid. D. An increase in inventory.arrow_forward
- Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:a. Increase in merchandise inventoryb. Increase in prepaid expensesc. Depreciation of fixed assetsd. Gain on disposal of fixed assetse. Amortization of patentf. Increase in notes payable due in 120 days to vendorsg. Increase in accounts payableh. Decrease in wages payablei. Decrease in notes receivable due in 60 days from customersj. Decrease in accounts receivablek. Loss on retirement of long-term debtarrow_forwardWhich of the following items is reported on a statement of cash flows prepared using the direct method?a. Bad debts expense.b. Increase in accounts receivable.c. Depreciation expense.d. Cash payments to suppliers.arrow_forwardThese are the selected anaswer provide to select accordingly towards the cash statement: decrease in accounts payable, decrease in accounts receivable, decrease in inventory, decrease in prepaid insurance, decrease in salaries payable, depreciation expense, gain on sale of available for sale debt securities, gain on sale of equipment, increase in accounts payable, increase in account receivable, increase in inventory, increase in prepaid insurance, increase in salaries payable, loss of sale of available for slae securities, loss of sale of equipment, payment of cash dividends, payment of notes payable, purchase of equipment, sale of available for sale debt securities, sale of bonds payable, sale of equipment/ With these selection please out them into their designed areas to changes in oprerating assests and liabilities, cash flows from investing activities, cash flow from financing activities.arrow_forward
- Which of the following would be classified as a use of cash? a. An increase in depreciation. b. A decrease in accounts receivable. c. A decrease in accruals. d. Both decrease in accounts receivable & decrease in accruals e. All of thesearrow_forwardWhich of the following should be subtracted from net income in computing net cash flows from operating activities using the indirect method? a.A decrease in inventory b.An increase in accrued expenses c.A decrease in prepaid expenses d.An increase in inventoryarrow_forwardIndicate whether each item should be added to or subtracted from net income to arrive at the net cash flow from operating activities. a. Increase in inventory b. Amortization of discount on investment in bonds c. Decrease in accounts payable d. Amortization of discount on bonds payable e. Increase in salaries payable f. Increase in prepaid expenses g. Subsidiary loss under the equity method h. Gain on disposal of equipment i. Decrease in accounts receivable j. Increase in deferred tax liabilityarrow_forward
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