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Each of the following items must be considered in preparing a statement of cash flows. Indicate where

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Each of the following items must be considered in preparing a statement of cash flows. Indicate where each item is to be reported in the statement, if at all. Assume that net income is reported as ¥90,000 (amounts in thousands).

a. Accounts receivable increased from ¥34,000 to ¥39,000 from the beginning to the end of the year.

b. During the year, 10,000 ordinary shares with a par value of ¥100 per share were issued at ¥115 per share.

c. Depreciation expense amounted to ¥14,000, and intangible asset amortization amounted to ¥5,000.

d. Land increased from ¥10,000 to ¥30,000 due to purchase through issuance of long-term debt.

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a Accounts receivable increased from 34000 to 39000 from the beginning to the end of the year This i...View the full answer


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Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

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