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  • Apr 5, 2013, 01:00 PM
    belindabenson
    Answer accounting problems
    Can you please explain how to get the answer stated below?
    Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following income statement:
    Sales Revenue $240,000
    Interest Revenue 1,000
    Gain on sale of plant assets 4,000
    Total revenues and gains $245,000
    Cost of goods sold 110,000
    Salary expense 45,000
    Depreciation expense 12,000
    Other operating expenses 23,000
    Interest expense 1,000
    Income tax expense 5,000
    Total expenses $196,000
    Net income (loss) $49,000

    Other information provided:
    Current assets other than cash increase by $24,000.
    Current liabilities decrease by $1,000.
    Answer: $32,000 positive
  • Apr 5, 2013, 01:35 PM
    Fidget1
    49,000+12,000-4000-24,000-1,000 = 32,000

    That's the figures you need and it's now over to you to see if you understand where they come from and why they're + or -, or maybe you'll just take the solution and run.

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