mean... Com....C cor DewElCh 12-6Learning Objective z- Distinguish among operati

Question

mean... Com....C cor DewElCh 12-6Learning Objective z- Distinguish among operating financing and investing activities indirect method)Smith Clinic, Inc., is preparing its statement of cash flows (indirect method) for the year ended March 31, 2012. Consider the following items in preparing the company's statement of cash flows. Identify each item as an operating activity addition to net income (O+) or subtraction from net income (O-), an investing activity ), a financing activity (F), or an activity that is not used to prepare the cash flows statement by the indirect method (N). Place the appropriate symbol in the blank space. a. Increase in accounts payable b. Purchase of equipment c. Decrease in prepaid expense d. Collection of cash from customers e. Net income f. Retained earnings g. Payment of dividends h. Decrease in accrued liabilities i. Issuance of common stock i. Gain on sale of building k. Loss on sale of land I. Depreciation expense m. Increase in inventory n. Decrease in accounts receivable

Explanation / Answer

Answer:-

S.no. Particulars Remark a Increase in Accounts payable (O+) b Purchase of equipment (I) c Decrease in prepaid expense (O+) d Collection of cash from customers (N) e Net Income (N) f Retained earnings (N) g Payments of dividends (O+) h Decrease in accrued liabilities (O-) i Issuance of common stock (F) j Gain on sale of building (O-) k Loss on sale of land (O+) l Depreciation Expense (O+) m Increase in inventory (O-) n Decrease in accounts receiviable (O+)

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