A company reports the following adjustments to net income under the indirect method of calculating operating cash
Question:
Required
For each item, explain the circumstances that would require the adjustment. For example, a decrease in accounts receivable means that cash collections for the year are greater than sales. Therefore, a decrease in accounts receivable is added to net income.
Transcribed Image Text:
Increases to net income Decrease in accounts receivable Decrease in prepaid insurance Increase in taxes payable Depreciation expense Decreases to net income Decrease in accounts payable Decrease in salaries payable Gain on sale of equipment
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 69% (13 reviews)
A decrease in accounts receivable means that cash collections for the year are greater than sales Th...View the full answer
Answered By
Bhartendu Goyal
Professional, Experienced, and Expert tutor who will provide speedy and to-the-point solutions. I have been teaching students for 5 years now in different subjects and it's truly been one of the most rewarding experiences of my life. I have also done one-to-one tutoring with 100+ students and help them achieve great subject knowledge. I have expertise in computer subjects like C++, C, Java, and Python programming and other computer Science related fields. Many of my student's parents message me that your lessons improved their children's grades and this is the best only thing you want as a tea...
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Accounting questions
-
1. Under the indirect method of calculating operating cash flows, which of the following would be added to net income? a. Increase in current assets b. Non-cash expenses c. Gain on sale of equipment...
-
A company reports the following income statement and balance sheet information for the current year: Net income $ 400,000 Interest expense 20,000 Average total assets 3,500,000 Determine the rate...
-
A company reports the following income statement and balance sheet information for the current year: Net income $ 600,000 Interest expense 75,000 Average total assets 4,500,000 Determine the rate...
-
A small ice block of mass m starts from rest from the top of an inverted bowl in the shape of a hemisphere, as shown in the figure. The hemisphere is fixed to the ground, and the block slides without...
-
The Florida National Guard employs full- time civilian technicians to assist in training the guard and to help repair and maintain the guards equipment and supplies. As a condition of their...
-
This and the next two exercises are based on the test statistic usually used to test a set of J linear restrictions in the generalized regression model: where is the GLS estimator. Show that if ??...
-
Will a change in required rate of return have a greater impact on a company that pays out 75% of its profits than a company that has a payout ratio of 5%, but which should increase to 75% in 25 years?
-
Determine the due date and the amount of interest due at maturity on the followingnotes: Date of Note October 1 August 30 May 30 Interest Term of Face Amount $10,500 18,000 Rate Note 60 days 120 days...
-
Find the slope of the line graphed below. y 5- 3 B -3 -1- -2- 3 -5-
-
Please select and observe any small company you buy a product or require service from. Based on your observation, prepare a report that will address the following: 1. Identify the business name,...
-
The CEO of Cassette Tape Manufacturers is pleased because the company's cash flows from operations exceed net income. He considers this a sign of success. Cassette Tape's statement of cash flows...
-
The following items may or may not appear on the statement of cash flows: a. Net income b. Cash paid for equipment c. Cash received from customers d. Increase in accounts receivable e. Gain on sale...
-
What are the main influences on the quantity of real money that people and businesses plan to hold?
-
Suppose you just returned home from a vacation in Mazatlan, Mexico, where you exchanged U.S. dollars for Mexican pesos. How did your trip to Mexico affect the supply and demand for dollars and the...
-
Values of height in inches \((X)\) and weight in pounds \((Y)\) are recorded from a sample of 300 male college students. The resulting summary statistics are \(\bar{X}=70.5\) in., \(\bar{Y}=158...
-
Let \(Y\) be a Bernoulli random variable with success probability \(\operatorname{Pr}(Y=1)=p\), and let \(Y_{1}, \ldots, Y_{n}\) be i.i.d. draws from this distribution. Let \(\hat{p}\) be the...
-
You are a U.S. importer who buys goods from many different countries. How many U.S. dollars do you need to settle each of the following invoices? a. 1,000,000 Australian dollars for wool blankets...
-
Find the U.S. dollar value of each of the following currencies at the given exchange rates: a. \($1\) = C$.96 (Canadian dollars) b. \($1\) = 81 (Japanese yen) c. \($1\) = A$.95 (Australian dollars)...
-
Lead is a very toxic metal; if drinking water is contaminated with Pb 2+ ions, you should not drink it. Design an experiment to confirm the absence or presence of Pb 2+ ions in your drinking water...
-
Critical reading SAT scores are distributed as N(500, 100). a. Find the SAT score at the 75th percentile. b. Find the SAT score at the 25th percentile. c. Find the interquartile range for SAT scores....
-
Determine the vertical displacement of joint \(B\). Each A992 steel member has a cross-sectional area of \(4.5 \mathrm{in}^{2}\). A F E 8 ft B -8 ft 5 kip 6 ft
-
Sixty-year-old Jan Howard retired from her computer consulting business in Boston and moved to Florida. There she met 27-year-old Tami Galyon, who had just graduated from Eldon Community College with...
-
LaToya Gardner and Lamar Ross formed a limited liability company (LLC) with an operating agreement that provided a salary allowance of $58,000 and $42,000 to each member, respectively. In addition,...
-
Media Properties, LLC, has three members: KXT Radio Partners, Rachel Sizemore, and Daily Sun Newspaper, LLC. On January 1, 2008, the three members had equity of $240,000, $40,000, and $160,000,...
-
Diggins Excavation has a contractors equipment policy written on a scheduled basis. What is "scheduled" on this kind of policy? (Search Chapter 9) a. the locations at which Diggins is using its...
-
Segn el libro de Robbins, Coulter, y eCenzo, D. A. (2020). Fundamentals of management (11. a ed. Que es Compensacin y beneficios
-
The purpose of the Exclusion for Qualified Principal Residence Indebtedness is to provide tax relief on canceled debt for many homeowners involved in a mortgage foreclosure. Taxpayers can exclude...
Study smarter with the SolutionInn App