Asked by Le'Aisha Marshall on Jun 29, 2024
Verified
Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:
(a)Increase in prepaid expenses
(b)Amortization of patents
(c)Increase in salaries payable
(d)Gain on sale of fixed assets
(e)Decrease in accounts receivable
(f)Increase in notes receivable due in 60 days
(g)Amortization of discount on bonds payable
(h)Decrease in merchandise inventory
(i)Depreciation of fixed assets
(j)Loss on retirement of long-term debt
(k)Decrease in accounts payable
(l)Increase in notes payable due in 30 days
(m)Increase in income taxes payable
Amortization of Patents
The gradual write-off of the cost of a patent over its useful life to reflect its consumption, expiration, or decline in value.
Net Cash Flow
The amount of cash generated or lost over a specific period, taking into account cash inflows and outflows from operating, investing, and financing activities.
- Determine the net cash generated from operating activities through the application of the indirect method.
- Understand the impact of depreciation, amortization, gains, and losses on the statement of cash flows.
Verified Answer
LN
Lungile NomfundoJun 30, 2024
Final Answer :
(a)deducted
(b)added
(c)added
(d)deducted
(e)added
(f)deducted
(g)added
(h)added
(i)added
(j)added
(k)deducted
(l)added
(m)added
(b)added
(c)added
(d)deducted
(e)added
(f)deducted
(g)added
(h)added
(i)added
(j)added
(k)deducted
(l)added
(m)added
Learning Objectives
- Determine the net cash generated from operating activities through the application of the indirect method.
- Understand the impact of depreciation, amortization, gains, and losses on the statement of cash flows.