Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Determining Net Income from Net Cash Flow from Operating Activities Curwen Inc. reported net cash flow from operating activities of $225,000 on its statement of

image text in transcribed
Determining Net Income from Net Cash Flow from Operating Activities Curwen Inc. reported net cash flow from operating activities of $225,000 on its statement of cash flows for the year ended December 31. The following information was reported in the "Cash flows from operating activities" section of the statement of cash flows, using the indirect method: Decrease in income taxes payable $5,300 Decrease in inventories 13,200 Depreciation 20,300 Gain on sale of investments 9,100 Increase in accounts payable 3,700 Increase in prepaid expenses 2,200 Increase in accounts receivable 9,900 a. Determine the net income reported by Curwen Inc. for the year ended December 31. b. Curwen's net income is different than net cash flow from operating activities. Which of the following could possibly be the reason for such difference? a. Because depreciation expense which has no effect on cash flows from operating activities. b. Changes in current operating assets and liabilities that are added or deducted. c. Changes in fixed assets and liabilities that are added or deducted. d. Gain from sales of investment is included in net income while the sales proceeds are added in operating activities of cash flow statements. a and b

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

Accounting For Value

Authors: Stephen Penman, S Penman

1st Edition

0231151187, 9780231151184

More Books

Students also viewed these Accounting questions

Question

Recognize the causes and symptoms of stress.

Answered: 1 week ago

Question

Explain all drawbacks of application procedure.

Answered: 1 week ago

Question

8. How can an interpreter influence the message?

Answered: 1 week ago