cash flow problem
1. The income statement shows a loss of $40,000 on the sale of a building. How is the loss handled when computing net cash provided by operating activities?
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2. To determine the net cash provided by operating activities, an increase in prepaid assets should be:
a. not included in the calculation.
b. deducted from net income.
c. added to net cash flow.
d. added to net income.
3. Please explain why depreciation has to be added back to the net income while doing a cashflow statement using the indirect method ?
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4. The net loss for the year was $20,000. Depreciation expense was $6,000. Merchandise lnventory decreased by $4,000. Accounts Receivable decreased by $6,000. Accounts Payable decreased by $3,500. lncome Tax Payable decreased by $6,000. Calculate the net cash provided or used by operating activities for the year.
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5. Why are cash equivalents included on the statement of cash flows?
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Cash flow from operating activities
- Please determine the cash flow from operations in 2019.
Explain what is missing, in order to make a complete cash flow statement.
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Prepare a statement of cash flows for 2019. Additional information for the year follows:
a. Acquired land at a cost of 80 000$; paid one-half of the purchase price in cash and issued common stock for the balance.
b. Sold used equipment for $30,000 in cash. The original cost was $50,000; depreciation of $15,000 had been taken. The remaining change in the Property, Plant, and Equipment account represents a purchase of equipment for cash. Total depreciation expense for the year was $10,000.
c. Issued bonds payable at par value for cash.
d. Sold bond investments costing $20,000 at no gain or Joss during the year.
c. Paid $25,000 in cash dividends on the Common stock.