Cash Flows from Operating Activities-Indirect Method Indicate whether each of th

Question

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 a. Increase in merchandise inventory b. Increase in prepaid expenses c. Depreciation of fixed assets d. Gain on disposal of fixed assets e. Amortization of patent f. Increase in notes payable due in 120 days to vendors g. Increase in accounts payable h. Decrease in wages payable i. Decrease in notes receivable due in 60 days from customers j. Decrease in accounts receivable k. Loss on retirement of long-term debt Added Added Added Added

Explanation / Answer

Identify :

a. Increase in merchandise inventory Deducted b. Increase in prepaid expense Deducted c. Depreciation of fixed assets Added d. Gain on disposal of fixed assets Deducted e. Amortization of patent Added f. Increase in notes payable due in 120 days to vendors Added g. Increase in account payable Added h. Decrease in wages payable Deducted i. Decrease in notes receivable due in 60 days from customers Added j. Decrease in account receivable Added h. Loss on retirement of long term debt Added

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