Statement of Cash Flows
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Statement of Cash Flows
(1) Prepare the operating activities section of the statement of cash flows based
on the following information for A Company:
Net Income
$195,000
Depreciation Expense
$45,000
Loss on Sale Of Equipment
$5,000
Decrease in Accounts Receivable Compared to Prior Year
$15,000
Increase in Accounts Payable Compared to Prior Year
$17,000
Decrease in Prepaid Expenses Compared to Prior Year
$4,000
Use the Indirect Method.
(2) For each reconciliation item, explain why it has the specific effect (positive or
negative) on cash basis.
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Solution Summary
The solution explains how to prepare the Operating Activities section of the Statement of Cash Flows.
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(1) Prepare the operating activities section of the statement of cash flows based
on the following information for A Company:
Net Income $195,000
Depreciation Expense $45,000
Loss on Sale Of Equipment $5,000
Decrease in Accounts Receivable Compared to Prior Year $15,000
Increase in Accounts Payable Compared to Prior Year ...
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