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Cash can increase when there is a net loss

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The president of Frogger Company is puzzled. During the latest accounting period, the company experienced a net loss of $800,000 yet its cash increased $300,000 during the same period.

Discuss the circumstances under which this scenario could occur. Present evidence based on the various components of the statement of cash flows and the sources of information for preparing the statement.

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The expert examines how cash can increase when there is a net loss.

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The president of Frogger Company is puzzled. During the latest accounting period, the company experienced a net loss of $800,000 yet its cash increased $300,000 during the same period.

The Frogger Company experienced a loss of $800000 and it has the positive cash flow of $300000. Following are the reasons:

1. Loss of $800000 and positive cash flow of $300000 is due to amount of depreciation. Because, ...

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