In calculating the statement of cash flows, depreciation is added to net income because Group of...
In calculating the statement of cash flows, depreciation is added to net income because
Group of answer choices
it represents additional income for the firm.
it is a non-cash expense that was subtracted to initially lower the taxable income.
it is often a large number.
depreciation represents a net inflow of cash.
Homework Answers
Option B is correct. it is a non-cash expense that was subtracted to initially lower the taxable income.
Depriciation is an expenses which is non cash. No cash is outflowed because of depriciation but it lowers the taxable income. So after taking into consideration the tax effects, we add back the depriciation.
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In calculating the statement of cash flows, depreciation is
added to net income because
Group of...
Question 1 (60 points) Match items that appear on the statement of cash flows for the...
Question 1 (60 points) Match items that appear on the statement of cash flows for the year ended 12/31/2014 with the appropriate presentation on the statement. Decrease in salaries payable Increase in accounts receivable 1. added inflow in the operating activities section Net income 2. subtracted outflow in the operating activities section Cash paid for dividends 3. added inflow in the investing activities section Cash paid for construction of building 4 subtracted outflow in the investing activities section Cash received...
Which of these are added or subtracted from net income to compute the net cash flows...
Which of these are added or subtracted from net income to compute the net cash flows from operating activities? Select all that apply. Check all that apply. Decrease in notes payable Decrease in accrued wages and taxes Increase in Inventory Depreciation
33. Which of the following should be added to net income in calculating net cash flow...
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If a company reports a large amount of net income on its income statement during a...
If a company reports a large amount of net income on its income statement during a year, the firm must have Select one: A. positive cash flow from orerating activities. B. positive free cash flow. C. Positive cash flow from financing activities. D. None of the above are correct. ing ic AOT a source of cash? Which of the following would be a result of changing from the straight-line to the accelerated (MACRS) method of depreciation? Select one: A. Iower...
The Berndt Corporation expects to have sales of $15 million. Costs other than depreciation are expected...
The Berndt Corporation expects to have sales of $15 million. Costs other than depreciation are expected to be 80% of sales, and depreciation is expected to be $1.5 million. Al sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndt's federal-plus-state tax rate is 40%. Berndt has no debt. Set up an income statement. What is Berndt's expected net income Enter your answer in dollars. For example, an answer of...
Prepare statement of cash flows using the indirect method. The income statement for 2017 and the...
Prepare statement of cash flows using the indirect method. The
income statement for 2017 and the balance sheets for 2017 and 2016
are presented for Harding Industries, Inc.
Prepare the statement one section at a time. (Use parentheses
or a minus sign for numbers to be subtracted and for net cash
outflows.)
Harding Industries, Inc. Income Statement For the Year Ended December 31, 2017 Sales revenues $ 956,000 381,000 Less: Cost of goods sold Gross profit $575,000 Less operating expenses:...
In determining the cash flows from operating activities for the statement of cash flows by the...
In determining the cash flows from operating activities for the statement of cash flows by the indirect method, the depreciation expense for the period is added to the net income for the period.
1. Which of the following must be added to Operating Income when calculating Free Cash Flow?...
1. Which of the following must be added to Operating Income when calculating Free Cash Flow? Group of answer choices Depreciation Principal payments Interest payments Capital expenditures Tax payments 2. Replacement Value is a variation of: Group of answer choices Market-Comparable Valuation Method Earning Capitalization Method Present Value of Future Cash Flows Method Market Capitalization Method Asset-based Valuation Method 2. Replacement Value is a variation of: Group of answer choices Market-Comparable Valuation Method Earning Capitalization Method Present Value of Future...
True of false: 1. if a company uses the direct method of calculating net cash flows from operating activities, it must adjust net income for gains or losses when selling property when selling property...
True of false: 1. if a company uses the direct method of calculating net cash flows from operating activities, it must adjust net income for gains or losses when selling property when selling property, plant, & equipment 2. when preparing the operating activities section of the statement of cash flows using the indirect method, an increase in income taxes payable is added to net income 3. the issuance of a stock dividend is a cash outflow in the financing activities...
If the income statement depreciation expense exceeds the tax return depreciation expense, then which of the following de...
If the income statement depreciation expense exceeds the tax return depreciation expense, then which of the following describes the situation: Current year taxable income is lower than accounting income and the firm has a deferred tax asset Current year taxable income is lower than accounting income and the firm has a deferred tax liability Current year taxable income is higher than accounting income and the firm has a deferred tax liability Current year taxable income is higher than accounting income...
Question 1 (60 points) Match items that appear on the statement of cash flows for the year ended 12/31/2014 with the appropriate presentation on the statement. Decrease in salaries payable Increase in accounts receivable 1. added inflow in the operating activities section Net income 2. subtracted outflow in the operating activities section Cash paid for dividends 3. added inflow in the investing activities section Cash paid for construction of building 4 subtracted outflow in the investing activities section Cash received...
Which of these are added or subtracted from net income to compute the net cash flows from operating activities? Select all that apply. Check all that apply. Decrease in notes payable Decrease in accrued wages and taxes Increase in Inventory Depreciation
33. Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method? a depreciation expense b. an increase in inventory c. again on the sale of equipment d. dividends declared and paid 34. A corporation uses the Indirect Statement of Cash Flows. A fixed asset has been sold for $25,000 representing a gain of $3,750. The value in the cocrating activities section regarding this event would be: a $25,000...
If a company reports a large amount of net income on its income statement during a year, the firm must have Select one: A. positive cash flow from orerating activities. B. positive free cash flow. C. Positive cash flow from financing activities. D. None of the above are correct. ing ic AOT a source of cash? Which of the following would be a result of changing from the straight-line to the accelerated (MACRS) method of depreciation? Select one: A. Iower...
The Berndt Corporation expects to have sales of $15 million. Costs other than depreciation are expected to be 80% of sales, and depreciation is expected to be $1.5 million. Al sales revenues will be collected in cash, and costs other than depreciation must be paid for during the year. Berndt's federal-plus-state tax rate is 40%. Berndt has no debt. Set up an income statement. What is Berndt's expected net income Enter your answer in dollars. For example, an answer of...
Prepare statement of cash flows using the indirect method. The
income statement for 2017 and the balance sheets for 2017 and 2016
are presented for Harding Industries, Inc.
Prepare the statement one section at a time. (Use parentheses
or a minus sign for numbers to be subtracted and for net cash
outflows.)
Harding Industries, Inc. Income Statement For the Year Ended December 31, 2017 Sales revenues $ 956,000 381,000 Less: Cost of goods sold Gross profit $575,000 Less operating expenses:...
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