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fenix001 [56]
3 years ago
5

Depreciation expense is added back to net income when preparing the cash flow from operating activities section because deprecia

tion represents a(n) ______ reduction to net income.
Business
1 answer:
luda_lava [24]3 years ago
4 0

Answer:

Depreciation expense is added back to net income when preparing the cash flow from operating activities section because depreciation represents a non cash reduction to net income. Depreciation is a non cash reduction because it notes down the the reduction in the value of an asset due to use as an expense and because the company isn't making any cash transactions due to depreciation of assets therefore it is a non cash expense and this is why it is added back to net income when preparing cash flow from operating activities.

Explanation:

You might be interested in
The break-even point is that level of activity where: Multiple Choice a) total revenue equals total cost. b) variable cost equal
shtirl [24]

Answer:

a) total revenue equals total cost.

Explanation:

The break-even point is the level of activity in which total revenue equals total cost. It can also be defined in terms of  units sold for a year is as the fixed expenses for the year divided by the contribution margin per unit of product. Note that exactly at the break-even point, there is no profit or loss.

Therefore, the answer is alternative a).

3 0
3 years ago
The following information is taken from the operating section of the statement of cash flows (direct method) of Battery Builders
ollegr [7]

Answer:

See below

Explanation:

1. Complete accrual basis income statement

Sales

($28,000 + $3,000)

$31,000

Less cost of goods sold

($13,000 + $2,000 - $3,000)

-$12,000

Operating expenses

($9,000 - $2,000)

-$7,000

Depreciation expenses

-$4,000

Income tax

($4,000 + $1,000)

-$5,000

Amortization expense

-$1,000

Gain on sale of equipment

$2,000

Net income

$4,000

2. Cash flow statement (Indirect)

Net income

$4,000

Adjustments;

Add depreciation

$4,000

Add write off intangibles

$1,000

Less gain on sale of equipment

-$2,000

Less increase in accounts receivables

-$3,000

Less increase in inventory

-$3,000

Add increase in accounts payable

$2,000

Less decrease in accrued payable

-$2,000

Add increase in deferred income tax payable

$1,000

Net cash from operations $2,000

7 0
2 years ago
Carla Vista Electronics reported the following information at its annual meetings: The company had cash and marketable securitie
adell [148]

Answer:

$6,718,553

Explanation:

Working capital is the net of current assets (Inventory, account receivables, Cash etc) and current liabilities (Accounts payable, short term notes payable etc).

It is a financial measure that gives insight into how liquid a company is. .

As such, the company's working capital

= $1,235,455 - $4,159,357 + $7,184,800 + $3,472,300 - $1,136,100 + $121,455

( the signs are positive for assets and negative for liabilities)

= $6,718,553

6 0
3 years ago
a commercial bank has $1,000,000 of customer checking deposits and actual reserves of $300,000. if the reserve ratio is 20 perce
alexira [117]

The maximum amount of new loans the bank can extend is $800,000.

<h3>What is the maximum amount of new loans the bank can extend?</h3>

The reserve ratio is the amount of deposits that must be kept as reserves with the central bank. The money that is not kept as reserves can be used to create loans.

Maximum loan amount = deposit - (reserve ratio x deposits)

1,000,000 - (0.2 x 1,000,000) = $800,000

To learn more about required reserves, please check: brainly.com/question/26960248

#SPJ11

8 0
2 years ago
On January 1, Cleaner Water, Inc., a nongovernmental not-for-profit organization, received $20,000 and an unconditional pledge o
KengaRu [80]

Answer:

$66,240

Explanation:

Calculation to determine what amount of net assets is with donor restrictions reported in the year the pledge was received

Using this formula

Net Assets=Unconditional pledge amount *Present value of an ordinary annuity

Let plug in the formula

Net Assets=$20,000*3.312

Net Assets=$66,240

Therefore what amount of net assets is with donor restrictions reported in the year the pledge was received will be $66,240

4 0
3 years ago
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