Use the indirect method to determine cash flow from operating activities. An accountant for Hasbro computed the
Question:
Use the indirect method to determine cash flow from operating activities.
An accountant for Hasbro computed the following information by making comparisons between Hasbro’s 2010 and 2009 balance sheets. Further information was determined by examining the company’s 2010 income statement.
1. The amount of an increase in the balance of the Accounts Receivable account.
2. The amount of a loss arising from the sale of land.
3. The amount of an increase in the balance of the Operating Expenses Payable account.
4. The amount of a decrease in the balance of the Bonds Payable account.
5. The amount of Depreciation Expense shown on the income statement.
6. The amount of cash dividend paid to the stockholders.
7. The amount of a decrease in the balance of an Unearned Revenue account.
8. The amount of an increase in the balance of an Inventory account.
9. The amount of an increase in the balance of a Land account.
10. The amount of a decrease in the balance of a Prepaid Rent account.
11. The amount of an increase in the balance of a Treasury Stock account.
Required:
For each item described above indicate whether the amount should be added to or subtracted from the amount of net income when determining the amount of cash flow from operating activities. If an item does not affect cash flow from operating activities, identify it as being not affected.
1. The amount of an increase in the balance of the Accounts Receivable account.
2. The amount of a loss arising from the sale of land.
3. The amount of an increase in the balance of the Operating Expenses Payable account.
4. The amount of a decrease in the balance of the Bonds Payable account.
5. The amount of Depreciation Expense shown on the income statement.
6. The amount of cash dividend paid to the stockholders.
7. The amount of a decrease in the balance of an Unearned Revenue account.
8. The amount of an increase in the balance of an Inventory account.
9. The amount of an increase in the balance of a Land account.
10. The amount of a decrease in the balance of a Prepaid Rent account.
11. The amount of an increase in the balance of a Treasury Stock account.
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Step by Step Answer:
1 Account Effect to Operating activity increase in the balance of the Accounts Receivable Subtract This item will be deducted from net income while ca...View the full answer
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
