Answer
(1)Subtracted (2) Subtracted (3) Subtracted (4) yes, it will affect the statement of cash flow as the amortization of bonds payable (premium) to be added back to the Net income because, it is a non cash expense.
Explanation:
Solution
Given that:
(1) The changes of debit to current assets are added or subtracted from net income:
Answer: They are subtracted from net income
(2) The changes of debit to current liabilities are added or subtracted from net income.
Answer: they are subtracted from net income
(3) Redemption gains of bonds are added or subtracted from net income.
Answer: Gains on redemption of bonds are subtracted from net income
(4), Yes, it will affect the statement of cash flow As the amortization of bonds payable (premium) to be added back to the Net income, because it is a non cash expense.
Thus the cash flow statement is adjusted.
