Question

In preparing the cash flows from operating activities section of the statement of cash flows by...

In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method the net decrease in inventories from the beginning to the end of the period is added to net income for the period

true or false

Homework Answers

Answer #1

The above said statement is TRUE

Explanation:

While preparing cash flow form operating activities Decrease in current assets is added back to net income and Increase in current assets is subtracted from Net income and the other side Increase in current Liabilities is added back to net income and Decrease in current Liabilities is subtracted

I hope this clear your doubt.

Feel free to comment if you still have any query or need something else. I'll help asap.

Do give a thumbs up if you find this helpful.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
in preparing the cash flows from operating activities section of the statement of cash flows by...
in preparing the cash flows from operating activities section of the statement of cash flows by the indirect method the amortization of bond discount for the period is deducted from the net income for the period true our faults
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $244,900. Depreciation recorded on equipment and a building amounted to $73,200 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $64,900 $68,790 Accounts receivable (net) 82,290 84,890 Inventories 162,250 146,250 Prepaid expenses 9,020 9,700 Accounts payable (merchandise creditors) 72,490 76,770...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $120,600. Depreciation recorded on store equipment for the year amounted to $19,900. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $49,330 $44,890 Accounts receivable (net) 35,370 33,170 Inventories 48,290 50,500 Prepaid expenses 5,430 4,260 Accounts payable (merchandise creditors) 46,220 42,470 Wages payable...
Cash Flows from Operating Activities—A method of reporting the cash flows from operating activities as the...
Cash Flows from Operating Activities—A method of reporting the cash flows from operating activities as the net income from operations adjusted for all deferrals of past cash receipts and payments and all accruals of expected future cash receipts and payments.Indirect Method The net income reported on the income statement for the current year was $148,200. Depreciation recorded on store equipment for the year amounted to $24,500. Balances of the current asset and current liability accounts at the beginning and end...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $202,100. Depreciation recorded on equipment and a building amounted to $60,400 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $51,330 $54,410 Accounts receivable (net) 65,090 67,140 Inventories 128,330 115,680 Prepaid expenses 7,130 7,670 Accounts payable (merchandise creditors) 57,340 60,720...
Cash Flows from operating activities -indirect method The net income reported on the income statement for...
Cash Flows from operating activities -indirect method The net income reported on the income statement for the current year was 185000 depreciation recorded on equipment and a building amounted to 96000 for the year. Balances of the current asset and current liability account at the beginning and end of the year are as follows: End of Year Beginning of Year Cash 75,900 86150 Accts receivable 84550 90000 Inventories 186200 175000 prepaid expenses 3600 4500 Accounts Payable 91500 110000 Salaries Payable...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $128,200. Depreciation recorded on store equipment for the year amounted to $21,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $49,100 $45,170 Accounts receivable (net) 35,200 33,380 Inventories 48,070 50,820 Prepaid expenses 5,400 4,290 Accounts payable (merchandise creditors) 46,010 42,730 Wages payable...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $116,500. Depreciation recorded on store equipment for the year amounted to $19,200. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $47,530 $43,730 Accounts receivable (net) 34,080 32,320 Merchandise inventory 46,530 49,200 Prepaid expenses 5,230 4,150 Accounts payable (merchandise creditors) 44,540 41,370 Wages...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the...
Cash Flows from Operating Activities—Indirect Method The net income reported on the income statement for the current year was $137,900. Depreciation recorded on store equipment for the year amounted to $22,800. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $53,640 $48,810 Accounts receivable (net) 38,460 36,070 Merchandise inventory 52,510 54,910 Prepaid expenses 5,900 4,640 Accounts payable (merchandise creditors) 50,260 46,170 Wages...
True or False 1. The approach to preparing the cash flow statement relies on the following...
True or False 1. The approach to preparing the cash flow statement relies on the following rearrangement of the balance sheet equation: Change in cash = Change in (Liabilities + Stockholders' Equity + Noncash Assets). 2. Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows. 3. In the decline phase, the company continues to enjoy positive operating cash flows but stops spending cash on investing...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT