When using the indirect method, why are gains on the sale of plant assets subtracted from net

Question:

When using the indirect method, why are gains on the sale of plant assets subtracted from net income in the operating activities section of the cash flow statement? Why are losses on the sale of plant assets added to net income?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Financial Accounting

ISBN: 9780136060482

1st Edition

Authors: Jeffrey Waybright, Robert Kemp

See More Books

Question Posted: Jul 08, 2015 02:48 AM

See More Questions

Why must preferred stock dividends be subtracted from net income in computing earnings per share? Discuss.
Why must preferred stock dividends be subtracted from net income in computing earnings per share?
From station 4+70 with center heights of 1 m in fill, the ground line makes a uniform slope of 4.7% to station 4+135 whose center heights is 2.5m in cut. Determine the slope of the new roadway (%)....
Concentric with the circle x 2 + y 2 + 2x 8y + 8 = 0 and passes through (2, 3)
Looking back to Figures 15-5 and 15-6, review how the economy moved from the short-run equilibrium interest rate at 10 percent per year to the long-run equilibrium. Now explain what would occur in...
Fence Industries is preparing its annual profit plan. As part of its analysis of the profitability of its customers, management estimates that the $19,500 for sales support should be assigned to the...
Which sales promotional tool is most common for new products?
On June 30, 2018, a county (government) hospital bought 3,000 shares of stock for $94,000 intending to hold the investment for its proposed expansion of its trauma center. The market value of the...
Given the following; 29 Day Billing Cycle 4/17 Billing Date Previous Balance = $1,100 4/27 Payment = $700 4/29 Charge = $300 5/7 Payment = $50 The average daily balance is: Group of answer choices...
Sam Easton started out as a real estate agent in Atlanta ten years ago. After working two years for a national real estate firm, he transferred to Dallas, Texas, and worked for another realty agency....
What are some of the reasons why a cash flow statement may be important to users of financial statements?
How does an increase in accounts receivable during the year affect the cash flow statement (if at all)? Why?
A gull is flying horizontally 8.00 m above the ground at 6.00 m/s. The bird is carrying a clam in its beak and plans to crack the clamshell by dropping it on some rocks below. Ignoring air...
List the model assumptions for one-way ANOVA and briefly explain how to assess them.
Remember that a correctly labeled graph requires that you label all axes, curves, and equilibrium point values. The word "calculate" means you must show your work. Assume the market for Good Z is in...
Answer the following questions by writing a paragraph or two in English. (a) [easy] Previously we defined probability as P(A) = Describe a situtation where this fails to produce the correct...
Find f''(x). f(x)=5x-14x- 612x f'(x)=
Simplify. 32-6 3-6
If $x$ and $y$ are statistically independent, then $E[x y]=E[x] E[y]$. That is, the expected value of the product $x y$ is equal to the product of the separate mean values. If $z=x+y$,...
Economic feasibility is an important guideline in designing cost accounting systems. Do you agree? Explain.
If we divide a data set into four approximately equal parts, the three dividing points are called quartiles. If we divide a data set into 100 approximately equal parts, the 99 dividing points are...
Why do some accountants prepare an end-of-period spreadsheet?
Why do some accountants prepare an end-of-period spreadsheet?
What is the difference between a current liability and a long-term liability?
Assignment Title: The Role of Bookkeeping in Business Management and Financial Reporting Objective: Understand the importance of proper bookkeeping procedures in the management of...
17) The adjustment that is made to allocate the cost of a building over its expected life is called:A) depreciation expense.B) residual value.C) accumulated depreciation.D) None of the above answers...
9) Prepaid Rent is considered to be a(n):A) liability.B) asset.C) contra-asset.D) expense.10) As Prepaid Rent is used, it becomes a(n):A) liability.B) expense. C) contra-asset.D) contra-revenue.11)...

When using the indirect method, why are gains on the sale of plant assets subtracted from net

Question:

Step by Step Answer:

Gains on the sale of plant assets add to net income but are no...View the full answer

Financial Accounting

Students also viewed these Accounting questions