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 Item Accounts receivable Inventory Prepaid expenses Accounts payable Accrued liabilities Income taxes payable Sale of equipment Sale of long-term investments $ 72,000 decrease 113,000 increase 3,900 decrease 45,000 decrease $ 9,700 increase 15,600 increase 8,700 gain s 12,100 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 72.000 113,000 3.900 45.000 9,700 S 15.600 8,700 Sale of long-term investmentsS 12.100 Accounts receivable Prepaid expenses Income taxes payable Sale of equipment

Explanation / Answer

Increase in Current Assets is deducued and Increase in Current Liabilitie is Added

Gain are deducted and Loss are added back to reconcile net for cash flow from operating income

Account Receivable 72000 Added Inventory 1130000 Deducted Prepaid Expense 3900 Added Account Payable 45000 Deducted Accrude Liabilities 9700 Added Income Tax Payables 15600 Added sales of Equipment 8700 Deducted Sales of long term Investment 12100 Added

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