Asked by Taylor Gonzalez on Jun 03, 2024
Verified
Based on the information provided below for Krackle Corp.,complete the following worksheet to be used to prepare the statement of cash flows using the indirect method.
(a)Net income for the year was $30,000.
(b)Dividends of $10,000 were declared and paid.
(c)Krackle's only noncash expense was depreciation which totaled $50,000.
(d)The company purchased plant assets for $70,000.
(e)Notes payable in the amount of $40,000 were issued during the year for cash.
Indirect Method
A method often used in cash flow statements to convert net income into net cash flow from operating activities by adjusting for non-cash transactions and changes in working capital.
Net Income
The total profit of a company after all expenses and taxes have been deducted from revenue, also known as net earnings or net profit.
Noncash Expense
Expenses that do not directly result in a physical outflow of cash but are recorded in the accounting records, such as depreciation.
- Develop the Cash Flow Statement through the application of the indirect method.
- Understand the application of spreadsheets in the preparation of the Cash Flow Statement.
Verified Answer
Learning Objectives
- Develop the Cash Flow Statement through the application of the indirect method.
- Understand the application of spreadsheets in the preparation of the Cash Flow Statement.
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