A company reports the following adjustments to net income under the indirect method of calculating operating cash
Question:
Required
For each item, explain the circumstances that would require the adjustment. For example, a decrease in accounts receivable means that cash collections for the year are greater than sales. Therefore, a decrease in accounts receivable is added to net income.
Transcribed Image Text:
Increases to net income Decrease in accounts receivable Decrease in prepaid insurance Increase in taxes payable Depreciation expense Decreases to net income Decrease in accounts payable Decrease in salaries payable Gain on sale of equipment
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 69% (13 reviews)
A decrease in accounts receivable means that cash collections for the year are greater than sales Th...View the full answer
Answered By
Bhartendu Goyal
Professional, Experienced, and Expert tutor who will provide speedy and to-the-point solutions. I have been teaching students for 5 years now in different subjects and it's truly been one of the most rewarding experiences of my life. I have also done one-to-one tutoring with 100+ students and help them achieve great subject knowledge. I have expertise in computer subjects like C++, C, Java, and Python programming and other computer Science related fields. Many of my student's parents message me that your lessons improved their children's grades and this is the best only thing you want as a tea...
3.00+
2+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Accounting questions
-
1. Under the indirect method of calculating operating cash flows, which of the following would be added to net income? a. Increase in current assets b. Non-cash expenses c. Gain on sale of equipment...
-
A company reports the following income statement and balance sheet information for the current year: Net income $ 400,000 Interest expense 20,000 Average total assets 3,500,000 Determine the rate...
-
A company reports the following income statement and balance sheet information for the current year: Net income $ 600,000 Interest expense 75,000 Average total assets 4,500,000 Determine the rate...
-
A small ice block of mass m starts from rest from the top of an inverted bowl in the shape of a hemisphere, as shown in the figure. The hemisphere is fixed to the ground, and the block slides without...
-
The Florida National Guard employs full- time civilian technicians to assist in training the guard and to help repair and maintain the guards equipment and supplies. As a condition of their...
-
Rex Electric has decided to move into low-rise ( 2 to 8 floors) commercial building electrical wiring. After great success in upscale residential and small commercial wiring, they have identified...
-
The flow in the impeller of a centrifugal pump is modeled by the superposition of a source and a free vortex. The impeller has an outer diameter of \(0.5 \mathrm{~m}\) and an inner diameter of \(0.3...
-
Charlies Cycles Inc. has $110 million in sales. The company expects that its sales will increase 5% this year. Charlies CFO uses a simple linear regression to forecast the companys inventory level...
-
A. Calculate the cross-arc elasticity in the following situation. (mathematical method) Price X Amount Y $10 70 $13 100 Based on the above result, consumer response regarding products can be...
-
The Chewy Candy Company would like to determine an aggregate production plan for the next six months. The company makes many different types of candy but feels it can plan its total production in...
-
The CEO of Cassette Tape Manufacturers is pleased because the company's cash flows from operations exceed net income. He considers this a sign of success. Cassette Tape's statement of cash flows...
-
The following items may or may not appear on the statement of cash flows: a. Net income b. Cash paid for equipment c. Cash received from customers d. Increase in accounts receivable e. Gain on sale...
-
The newest Graeter's plant can produce far more ice cream than is needed today. The company also makes ice cream at its original plant and at the plant formerly owned by a franchisee. What are the...
-
On July 1 , Scene Co . borrowed $ 1 5 , 0 0 0 cash from First Bank by signing a 3 0 - day, 5 % interest - bearing note. Scene will record this entry with a credit to Notes Payable in the amount?
-
Include some quantitative or qualitative accomplishments for the position of a case manager.
-
Consider the following figure in the horizonal plane (ie no gravity). Assume "small" motion - that is, you can assume that the angle the rocker arm rotates remains small, 0 = 0 is when the rocker arm...
-
Wilferd Accounting Services needs to regularly update its existing computer workstations. If it purchases the workstations, it will need to pay $26,500 today and it can sell the equipment after two...
-
Use the information below to answer the following questions: tate POOR NORMAL GOOD Weight a .4 probability 40% 35% 25% what is the return of stock a what is the return of stock b Return on A RETURN...
-
A company is allowed to hold its annual meeting online _______________. (a) If a majority of its shareholders approve (b) If it also holds a live meeting for shareholders who want to attend in person...
-
Critical reading SAT scores are distributed as N(500, 100). a. Find the SAT score at the 75th percentile. b. Find the SAT score at the 25th percentile. c. Find the interquartile range for SAT scores....
-
Sixty-year-old Jan Howard retired from her computer consulting business in Boston and moved to Florida. There she met 27-year-old Tami Galyon, who had just graduated from Eldon Community College with...
-
LaToya Gardner and Lamar Ross formed a limited liability company (LLC) with an operating agreement that provided a salary allowance of $58,000 and $42,000 to each member, respectively. In addition,...
-
Media Properties, LLC, has three members: KXT Radio Partners, Rachel Sizemore, and Daily Sun Newspaper, LLC. On January 1, 2008, the three members had equity of $240,000, $40,000, and $160,000,...
-
A pilot taxiing on the airport loses radio contact with ATC and then sees a flashing red light being shown at his aircraft from the Air Traffic Control Tower. What action should the pilot take?
-
Discussion questions: It is better to be a human being dissatisfied than a pig satisfied; better to be Socrates dissatisfied than a fool satisfied. 1. Do you agree? Why (not)? 2. What would a...
-
Describe how to make a strong magnet out of an initially unmagnetized iron rod without using the earth or another bar magnet. Include in your instructions the materials one would need, how one could...
Study smarter with the SolutionInn App