Why do we exclude depreciation expense and the gain or loss on sale of an asset from

Question:

Why do we exclude depreciation expense and the gain or loss on sale of an asset from the operating activities section of the statement of cash flows under the direct method?

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: 978-0078025549

3rd edition

Authors: J. David Spiceland, Wayne Thomas, Don Herrmann

See More Books

Question Posted: Jul 13, 2016 03:49 AM

See More Questions

The following is a copy of the auditors working paper relating to the testing of depreciation expense for the client New Millennium Ecoproducts. Required (a) The opening book value balances of the...
If depreciation expense is not a cash flow, why do we have to subtract it and add it back? Why not just ignore it?
Zoe Corporation bought a large piece of equipment for $9,000,000 during 2013. When the company purchased the equipment, it estimated a useful life of five years ignoring the year of acquisition, and...
As you might imagine, the chart of accounts for a manufacturing firm would be different from that of a service firm. Not surprisingly, service firms differ so much that software now exists for almost...
What is the fraud scale, and how does it relate to pressure, opportunity, and integrity?
! Required information [The following information applies to the questions displayed below.] Hope is a self-employed taxpayer who turns 54 years old at the end of the year (2021). In 2021, her net...
Cigar smoking and cancer. The Journal of the National Cancer Institute (Feb. 16, 2000) published the results of a study that investigated the association between cigar smoking and death from...
Dickeys has equipment that cost $45,000 and that has been depreciated $26,000. Instructions Record the disposal under the following assumptions. (a) It was scrapped as having no value. (b) It was...
Cul de los siguientes describe correctamente el registro de una declaracin de dividendos por parte de la junta directiva de una empresa? Un dbito a las utilidades retenidas y un crdito al efectivo....
An article by J. J. Pignatiello, Jr. and J. S. Ramberg in the Journal of Quality Technology (Vol. 17, 1985, pp. 198- 206) describes the use of a replicated fractional factorial to investigate the...
Changes in current assets and current liabilities are used in determining net cash flows from operating activities. Changes in which balance sheet accounts are used in determining net cash flows from...
Explain what we mean by noncash activities and provide an example.
Does Social Security provide much benefit in terms of consumption smoothing over the retirement decision? Contrast Social Security with a different social insurance program, unemployment insurance,...
How do transnational organizations and agreements influence national sovereignty and political autonomy ?
How do individuals reconcile the tension between rational deliberation and emotional impulses when making consequential decisions amidst volatile environments, and to what extent does the phenomenon...
Watch the video clip below; https://www.youtube.com/watch?v=sE6Ox3ikCMU 1. Do you think that 'Rick and Morty' was a good choice? Justify your answer. 2. Do you think that this campaign will work for...
by the hypothesis that we want to do descriptive method, and quantative research in Tim hortons company, the question is A convincing closing statement, including that you'll develop your research...
Bottom of Form Why do you think ethics is important in healthcare management? What do you see as the biggest risks and temptations? How is your INTEGRITY a core principle in your professional ethical...
Sketch the graph of a function whose derivative ' has the given description. f'(x) > 0 for x < 1 and f'(x) < 0 for x > 1
The vapor pressure of the liquid NH, is measured at different temperatures. The following vapor pressure data are obtained. Temperature, K P, mmHg 217.1 223.4 234.7 588.1 Calculate the enthalpy of...
Continental Airlines signed contracts with its major creditors (mostly banks) that require the company to maintain a minimum cash balance of $600 million, a minimum shareholders equity balance of...
Fortune magazine ran an article titled New Ethics or No Ethics? Questionable Behavior Is Silicon Valleys Next Big Thing, which recounts stories of Internet companies that aggressively inflate their...
The following quote was taken directly from the audit report written by Price water house Coopers on the 2009 financial statements of Kroger. In our opinion, the accompanying consolidated balance...
question 6 Timely Inc. produces luxury bags. The budgeted sales and production for the next three months are as follows july. august september Sales, in units 1,115. 1229. 1302 Production. in units...
On May 12 Zimmer Corporation placed in service equipment (seven-year property) with a basis of $220,000. This was Zimmer's only asset acquired during the year. Calculate the maximum depreciation...
Power Manufacturing has equipment that it purchased 7 years ago for $2,550,000. The equipment was used for a project that was intended to last for 9 years and was being depreciated over the life of...

Why do we exclude depreciation expense and the gain or loss on sale of an asset from

Question:

Step by Step Answer:

Depreciation expense has no effect on cash flows It is merely an allocati...View the full answer

Financial Accounting

Students also viewed these Managerial Accounting questions