The net income reported on the income statement for the current year was $840,000. Depreciation recorded on plant assets was $38,000. Accounts receivable and inventories increased by $8,000 and $32,000, respectively. Prepaid expenses and accounts payable decreased by $4,000 and $44,000, respectively. How much cash was provided by operating activities? Answer $798,000.
Question 6 Question 6 Which of the following is the first step in preparing the statement of cash flows? Answer Determine the net income.
Note on this: arguably the net income would already be known from the income statement preparation. Determining cash from operating activities would only apply if you are using the indirect method, although the tester might believe that this is the correct answer.
Question 7 Question 7 During 2010, Bale Company sold equipment with a book value of $90,000 for proceeds of $104,000. The company purchased new equipment for $240,000 by signing a long-term note payable. No other transactions impacted long-term asset accounts during 2010. The investing section of the statement of cash flows will report Answer net cash outflows of $136,000
Question 8 Question 8 When using the indirect method to compute cash provided by operating activities Answer increases in accounts receivable are added to net income. 2.5 points
Question 9 Question 9 The statement of cash flows will not report the Answer amount of checks outstanding at the end of the period.