643 Chapter 13 Statement of Cash Flows EX 13-4 Cash flows from operating activit

Question

643 Chapter 13 Statement of Cash Flows EX 13-4 Cash flows from operating activities-indirect method 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: Obj. 2 A. Decrease in inventory B. Increase in accounts receivable G. Increase in salaries payable H. Decrease in prepaid expenses I. Amortization of patent J. Increase in notes payable due in 120 days to vendors K. Gain on disposal of fixed assets C. Increase in accounts payable D. Loss on retirement of long-term debt E. Depreciation of fixed assets F. Decrease in notes receivable due in 60 days from customers

Explanation / Answer

Decrease in inventory Added

Increase in accounts receivable Deducted

Increase in accounts payable Added

Loss on retirement of long-term debt Added

Depreciation of fixed assets Added

Increase in notes receivable due in 60 days Added

Increase in salaries payable Added

Decrease in prepaid Expenses Added

Amortization of patents Added

Increase in notes payable due in 120 days Added

Gain on sale of fixed assets Deducted

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