Budget Auto Parts Company uses the indirect method to prepare the statement of cash flows
Refer to the following income statement:
Budget Company
Income Statement
Year Ended December 31, 2017
Sales Revenue $360,000
Interest Revenue 1,500
Gain on Sale of Plant Assets 6,000
Total Revenues and Gains $367,500
Cost of Goods Sold 165,000
Salary Expense 67,500
Depreciation Expense 18,000
Other Operating Expenses 34,500
Interest Expense 1,500
Income Tax Expense 7,500
Total Expenses 294,000
Net Income (Loss) $73,500
Additional information provided by the company includes the following:
Current assets other than cash increase by $36,000.
Current liabilities decrease by $1,500.
Prepare the operating activities section of the statement of cash flows.
What will be an ideal response
Cash Flows from Operating Activities:
Net Income $73,500
Adjustments to Net Income:
Depreciation Expense 18,000
Gain on Disposal of Plant Assets (6,000 )
Increase in Current Assets (36,000 )
Decrease in Current Liabilities (1,500 ) (25,500 )
Net Cash Provided by Operating Activities $48,000
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A major factor in the severity of the 2007-09 financial crisis was the massive reduction in the level of debt taken on by:
a. individuals b. business c. financial institutions d. all of the above e. none of the above
Which of the following presumptions is least likely to relate to the reliability of audit evidence?
a. The more effective internal control is, the more assurance it provides about the accounting data and financial statements b. An auditor's opinion is formed within a reasonable time to achieve a balance between benefit and cost c. Evidence obtained from independent sources outside the entity is more reliable than evidence secured solely within the entity d. The auditor's direct personal knowledge obtained through observation and inspection is more persuasive than information obtained indirectly