For the following activities, indicate the adjustment to be made, if any, to net
ID: 2466241 • Letter: F
Question
For the following activities, indicate the adjustment to be made, if any, to net income in the operating section of the cash flow statement prepared on the indirect method:
(A) Increase net income
(B) Decrease net income
(C) No adjustment (financing activity)
(D) No adjustment (financing activity)
_____1. Accounts receivable decreased by $5,000 from last year to this year.
_____2. Depreciation was $30,000.
_____3. Prepaid Expenses decreased $10,000.
_____4. Accounts Payable increased $20,000.
_____5. Merchandise inventory decreased by $15,000.
_____6. Office furniture increased $8,000.
_____7. Sold a building at a gain of $5,000.
_____8. Issued a cash dividend.
_____9. Amortization of intangible assets was $10,000.
_____10. Purchased 100 shares of Google common stock for $15,000.
Explanation / Answer
1. Increase net income
2. Increase net income
3. Increase net income
4. Increase net income
5. Increase net income
6. No adjustment (Investing activity)
7. Decrease net income
8. No adjustment (Financing Activity)
9. Increase net income
10. No adjustment (Investing activity)