Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

For the year-ending December 31, 2020, Home Manufacturing reported Net Income in the amount of $ 5,000,000. Included in this amount was a Pre-Tax Gain

For the year-ending December 31, 2020, Home Manufacturing reported Net Income in the amount of $ 5,000,000. Included in this amount was a Pre-Tax Gain of $ 1,500,000, related to the sale of equipment. At thetime of sale, the equipment sold had a book value of $ 2,500,000, and it was sold for $ 4,000,000. Since Home Manufacturing pays taxes at a rate of 20%, the after-tax gain was $ 1,200,000. ln additionneabfor the year ending December 31, 2020, Home Manufacturing reported depreciation in the amount of $ 60000. During the year, Accounts Receivable increased by $ 100,000, Inventorydecreased by $ 300,000, and Accounts Payable increased by $ 500,000. Home Manufacturing uses the Indirect Method when preparing their Statement of Cash Flows. Based on the information provided above, what is the amount of "Cash Provided by Operating Activity" that HomeManufacturing should report for their fiscal-year ending December 31, 2020?

A.4,800,000 B.5,300,000 C.5,600,000 D.7,800,000

E.None of the above

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

The ASQ Auditing Handbook

Authors: J. P. Russell,

4th Edition

0873898478, 978-0873898478

More Books

Students also viewed these Accounting questions

Question

Discuss Ms. Lincolns level of commitment to occupational safety.

Answered: 1 week ago