Asked by Lucia Cantu on Jun 11, 2024
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Samuel Company's accumulated depreciation-equipment account increased by $6,000, while patents decreased by $2,200 between balance sheet dates. There were no purchases or sales of depreciable or intangible assets during the year. In addition, the income statement showed a loss of $3,200 from the sale of investments. Assume no changes in noncash current assets and liabilities.Samuel Company reported a net income of $92,000. Determine net cash flow from operating activities using the indirect method.
Statement of Cash Flows
It's a financial document summarizing the total cash entering a company from operational earnings and investment revenues, as well as the cash spent on business-related activities and investment outlays during a specific period.
Operating Activities
Business activities related to the day-to-day operations that generate revenue, such as sales and purchasing of inventory.
Indirect Method
In accounting, a method used to calculate cash flows from operating activities by starting with net income and adjusting for non-cash transactions.
- Alter net profits in response to changes in assets and liabilities involved in operations to calculate cash flows from these activities.
- Revise the declared net income to reflect adjustments for non-cash transactions and the financial impact of asset sales.
Verified Answer
Learning Objectives
- Alter net profits in response to changes in assets and liabilities involved in operations to calculate cash flows from these activities.
- Revise the declared net income to reflect adjustments for non-cash transactions and the financial impact of asset sales.
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