Top Ten Scientific F 3 pice set lvory jad.. 3.20 points Changes in various accou
ID: 2655294 • Letter: T
Question
Top Ten Scientific F 3 pice set lvory jad.. 3.20 points Changes in various accounts and gains and losses on the sale of assets during the year for Argon Company are given below Accounts receivable Inventory Prepaid expenses Accounts payable Accrued liabilities Income taxes payable Sale of equipment Sale of long-term investments $ 72,000 increase $115,000 decrease $ 3.100 decrease $ 49,000 decrease $ 9,800 increase $ 15,300 decrease S 8,400 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 tem Amount Effect Accounts receivable 72,000 115.000 3.100 S49.000 9,800 5 300 8 400 .Inventory Prepaid expenses, Accounts payable Accrued lRabilities incoime taxes payable Sale of equipment Salé of long-tem investments SExplanation / Answer
(a) Increase in Accounts Receivable (Current Assets) - signifies a Cash Outflow. So it should be deducted.
(b) Decrease in Inventory (Current Assets) - signifies a Cash inflow. So it should be added.
(c) Decrease in Prepaid expense (Current Assets) - signifies a Cash inflow. So it should be deducted.
(d) Decrease in Accounts Payable (Current Liability) - signifies a Cash Outflow. So it should be deducted.
(e) Increase in Accrued Liability (Current Liability) - signifies a Cash Inflow. So it should be added.
(f) Decrease in Income tax Payable (Current Liability) - signifies a Cash Outflow. So it should be deducted.
(g) Sale of Equipment - signifies a Cash Inflow under Investing activities. So Operating Activities will remain unchanged.
(h) Sale of Long term investment - signifies a Cash Inflow under Investing activities. So Operating Activities will remain unchanged.
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