Team Shirts, Inc recognized $4,690 of insurance expense for the year. At the beginning of the year, the balance in Prepaid insurance was $400. At the end of the year, the balance was $775
How is the accounting information for these items reported on the statement of cash flows using the INDIRECT method?
What will be an ideal response?
The net increase in Prepaid insurance of $375 is subtracted from net income in the operating activities section of the statement. The $4,690 is not reported on the statement of cash flows separately because it has already been deducted in arriving at net income.
Business
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