Changes in various accounts and gains and losses on the sale of assets during th

Question

Changes in various accounts and gains and losses on the sale of assets during the year for Argon Company are given below: tem Accounts receivable Inventory Prepaid expenses Accounts payable Accrued liabilities Income taxes payable Sale of equipment Sale of long-term investments Amount $ 71,000 decrease $119,000 increase $ 3,400 decrease $ 45,000 decrease $ 9,700 increase $ 15,000 increase $ 8,100 gain $12,700 loss Required For each item, indicate whether the dollar amount should be added to or deducted from net income under the indirect method when computing the net cash provided by operating activities for the year Effect Item Accounts receivable Inventory Prepaid expenses Accounts payable Accrued liabilities Income taxes payable Sale of equipment Sale of long-term investments12,700 Amount $71,000 $119,000 3,400 $45,000 9,700 $ 15,000 8,100

Explanation / Answer

  Item Amount                       Accounts receivable 71,000 Add   Inventory 1,19,000 Deduct   Prepaid expenses 3,400 Add   Accounts payable 45,000 Deduct   Accrued liabilities 9,700 Add   Income taxes payable 15,000 Add   Sale of equipment 8,100 Deduct   Sale of long-term investments 12,700 Add

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