Question

The comparative balance sheets of Greenvale Games, Inc. show a net decrease in unexpired insurance of $400 and a net decrease in interest payable of $250. In order to reconcile net income with net cash flow from operating activities, net income should be:

Answer 1

Answer:

$150 increase

Explanation:

According to the scenario, computation of the given data are as follows,

Decrease in unexpired insurance = $400

Decrease in interest payable = $250

So, we can calculate the net income to reconcile by using following formula,

Net income = Decrease in unexpired insurance - Decrease in interest payable

= $400 - $250

= $150 ( Positive means increase)

So, net income should be increased by $150.