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Andreyy89
3 years ago
6

When reporting operating activities in a statement of cash flows, depreciation is: Multiple Choice ignored in the indirect metho

d. added back to net income in the indirect method. subtracted from net income in the indirect method. added back to net income in the direct method.
Business
1 answer:
snow_tiger [21]3 years ago
5 0

Answer:

added back to net income in the indirect method

Explanation:

Depreciation is an expense indicating a reduction in the value of the capital assets due to tear and wear, obsolescence, consumption, time span, etc. It's shown on the income statement debit side. It is a non-cash item that has no effect on the cash balance.

So while reporting operating activities using indirect method we added back the depreciation expense to net income

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The warehouse manager at Johnson Cor. is considering installing additional insulation in the warehouse. He estimates that the an
skelet666 [1.2K]

Answer:

9 years

Explanation:

Note: See the attached excel file for the calculation of the cumulative present value (PV).

Annual cost saving = $16,000 - $12,000 = $4,000

With annual cash saving of $4,000 and 12% return on investment (ROI), the cumulative PV of the cash flow from installing the insulation becomes positive in the 9th year at $1,313.

Since the cumulative PV is positive in the 9th year, that means the discounted payback year is 9th year. Therefore, the warehouse have to run for 9 years in order to justify the insulation project.

Note:

The actual discounted payback period is approximately 8 years and 1 month as calculated below:

Discounted payback period = 8 years and ((129.44/1,442.44) * 12) = 8 years and 1 month.

Download xlsx
8 0
3 years ago
What are the c’s of credit
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3 0
4 years ago
Tate Corporation purchased a building for its grocery store for $30,000 in 1970.Based on inflation estimates,the amount of this
Alex777 [14]

Answer:

B) Stable monetary unit concept

Explanation:

Based on the information given the concepts or principles of accounting that was being violated is called STABLE MONETARY UNIT CONCEPT reason been that this type of accounting principle believe that the dollar purchasing power should often be stable or fixed regardless of the increase or rise in market price which is inflation which is why an accountant will often ignore the impact of inflation on goods and services based on the assumption of the principle of STABLE MONETARY UNIT CONCEPT.

Therefore Tate corporation has violated the accounting principle of STABLE MONETARY UNIT CONCEPT by adjusting the building amount that was purchase in 1970 in the Accounting record from the amount of $30,000 to the amount of $75,000 due to the effect of inflation.

7 0
3 years ago
Who is responsible for the financial consequences of a minor's driving?
Fofino [41]

Answer: b. the minor's parents or guardians are responsible

The minor's parents or guardians are responsible for the financial consequences of a minor's driving, whether the minor has a license or not. It is a law under a legal concept called "vicarious liability" imposed in most states in the U.S


4 0
3 years ago
Time Warner Inc. is a leading media and entertainment company whose businesses include Turner, Home Box Office, and Warner Bros.
LekaFEV [45]

Answer:

Net Cash flow from Operating activities                       $16,422

Explanation:

The preparation of the Cash Flows from Operating Activities—Indirect Method is shown below:

Cash flow from Operating activities - Indirect method

Net loss - $13,402

Adjustment made:

Add: Depreciation, amortization, and impairments $34,790

Add: Decrease in accounts receivable $1,245

Less: Increase in inventory -$5,766

Less: Decrease in accounts payable -$445

Total of Adjustments $29,824

Net Cash flow from Operating activities                       $16,422

8 0
3 years ago
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