Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Ch 12 exercises #4 Changes in various accounts and gains and losses on the sale of assets during the year for Argon Company are given

Ch 12 exercises #4

Changes in various accounts and gains and losses on the sale of assets during the year for Argon Company are given below:

Item Amount
Accounts receivable $ 90,000 decrease
Inventory $ 120,000 increase
Prepaid expenses $ 3,000 decrease
Accounts payable $ 65,000 decrease
Accrued liabilities $ 8,000 increase
Income taxes payable $ 12,000 increase
Sale of equipment $ 7,000 gain
Sale of long-term investments $ 10,000 loss

Required:

For each item, indicate whether the dollar amount should be added to or deducted from net income under the indirect method when computing the net cash provided by operating activities for the year.

Item Amount Effect
Accounts receivable $90,000
Inventory $120,000
Prepaid expenses $3,000
Accounts payable $65,000
Accrued liabilities $8,000
Income taxes payable $12,000
Sale of equipment $7,000
Sale of long-term investments $10,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions