Question

Which of the following transactions is included in the operating activities section of a cash flow...

Which of the following transactions is included in the operating activities section of a cash flow statement prepared using the indirect method?

1) Gain on sale of plant asset

2) Sale of property, plant and equipment

3) Payment of cash dividend to the shareholders

4) Issuance of common stock to the shareholders

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Gain on sale of plant assets is included in the operating activities section of cash flow statement prepared using indirect method.

Correct option is 1.

While calculating net income, Gain on Sale of Plant is added. Hence, to calculate cash flows from operating activities, it is subtracted from net income.

Sale of property, plant and equipment- It is a cash inflow to be shown under investing activities.

Payment of cash dividend to the shareholders - It is cash outflow to be included under Financing activities.

Issuance of common stock to the shareholders - It is cash inflow to be included under Financing activities.

Kindly comment if you need further assistance. Thanks‼!

  

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1) Which of the following is a method for reporting cash flows from operating activities that...
1) Which of the following is a method for reporting cash flows from operating activities that begins with net income and reconciles to cash flows from operating​ activities? A.accrual method B.direct method C.indirect method D.cashminus−basis method 2) Under the indirect method of preparing a statement of cash​ flows, cash disbursed for the acquisition of a capital asset​ is: A.added in the financing activities section B.added in the investing activities section C.subtracted in the operating activities section D.subtracted in the investing...
Can you identify Operating activities section, Investing activities section, Financing activities section, or Noncash activities note?...
Can you identify Operating activities section, Investing activities section, Financing activities section, or Noncash activities note? - A cash dividend received from an investment in another company’s stock - Payment of Dividends on Common Stock - The receipt of cash from the issuance of common stock - The purchase of a long -term asset like land or equipment (with cash) - Sale of a long- term asset for cash - The issuance and repayment [retirement] of bonds payable - The...
Mach each cash flow to the section of the Statement of Cash Flows in which it...
Mach each cash flow to the section of the Statement of Cash Flows in which it would appear. Payment of Long-Term Debt Issuance of Stock to Acquire Land    Collection of Accounts Receivable .    Sale of Available-for-Sale Securities (Long Term) Payment of Employees' Wages Issuance of Common Stock for Cash Payment of Income Taxes Payable    Purchase of Equipment    Purchase of Treasury Stock (Common) 1. Cash Provided/Used by Financing Activities 2. Cash Provided/Used by Investing Activities 3. Cash...
1）In the statement of cash flows, in which section is the cash payment of salaries reported?...
1）In the statement of cash flows, in which section is the cash payment of salaries reported? A. Operating Activities B. Investing Activities C. Financing Activities D. Schedule of Noncash Transactions E. None of the above 2）In the statement of cash flows, in which section is the cash payment of dividends reported? A. Operating Activities B. Investing Activities C. Financing Activities 3）In the statement of cash flows, in which section is the cash receipt from the issuance of common stock reported?...
Statement of Cash Flows (Indirect method) Particulars Amount Cash Flow from operating activities: Net Income for...
Statement of Cash Flows (Indirect method) Particulars Amount Cash Flow from operating activities: Net Income for 2019 $58,850 Adjustments: Gain on sale of land ($8,000) Gain on sale of long term investment ($4,000) Depreciation $35,500 Amortization expense $5,000 Increase in accounts receivable ($4,550) Increase in Dividend receivable ($1,000) Increase in Inventories ($7,000) Decrease in Prepaid rent $9,000 Increase in Prepaid Insurance ($1,200) Increase in Office Supplies ($250) Decrease in Accounts payable ($4,000) Increase in Income tax payable $1,000 Increase in...
Which of the following methods of reporting cash flows provided by operating activities does the Financial...
Which of the following methods of reporting cash flows provided by operating activities does the Financial Accounting Standards Board recommend? A. The indirect method B. The direct method C. Either the indirect method or the direct method D. Neither the indirect method not the direct method In preparing cash flows provided by operating activities using the indirect method, which of the following is not deducted from net income? A. Decreases in current liability balances B. Increases in current asset balances...
When preparing the Statement of Cash Flow using the indirect method for the current year, which...
When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of a increase in the Common Stock account of $150,000 and an increase in the Paid-In Capital in Excess Par Common Stock of $25,000 for which cash of $175,000 was received for the issuance of additional common stock. Add the $175,000 as Cash received from the issuance of common stock in the Cash flow from...
1/ Both the direct method and the indirect method of computing net cash flow from operating...
1/ Both the direct method and the indirect method of computing net cash flow from operating activities convert accrual-based income statement amounts into cash flows. TRUE/ FALSE 2/ Under the indirect method, when machinery is sold at a gain, the gain is added in the operating section of the statement of cash flows and the cost is added in the investing section. TRUE/FALSE 3/ All of the following are financing activities except: Multiple Choice * 

Selling capital stock.
 * 

Lending...
Question 4 The major classifications of activities reported in the statement of cash flows are operating,...
Question 4 The major classifications of activities reported in the statement of cash flows are operating, investing, and financing. Classify each of the transactions listed below as: 1. Operating activity-add to net income. 2. Operating activity-deduct from net income. 3. Investing activity. 4. Financing activity. 5. Reported as significant noncash activity The transactions are as follows. Transactions Classifications of Activities (a) Issuance of common stock. (b) Purchase of land and building. (c) Redemption of bonds (d) Sale of equipment. (e)...
For the operating activities section of the statement of cash flow you can either use the...
For the operating activities section of the statement of cash flow you can either use the direct method or the indirect method, please state in detail one difference between the two methods.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT