Question


aluving...

When you have depreciation in your business do you add that to your cash outflow, inflow or do you leave it be?

or do you leave it alon when you are finding your net cash flow

5 months ago - 1 answers

Best Answer

Chosen by Asker

You add it to net income under operating activities like this: Cash flows from operating activities Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $65,150 Adjustments to reconcile net income to net cash provided by operating activities Decrease in accounts receivable . . . . . . . . . . . . . . . 5,000 Increase in merchandise inventory . . . . . . . . . . . . . (9,825) Increase in prepaid expenses . . . . . . . . . . . . . . . . . (2,950) Decrease in accounts payable . . . . . . . . . . . . . . . . (4,500) Increase in income taxes payable . . . . . . . . . . . . . . 975 Depreciation expense . . . . . . . . . . . . . . . . . . . . . . 20,000 Loss on sale of plant assets . . . . . . . . . . . . . . . . . . 4,000 Net cash provided by operating activities . . . . . . . . . . . . . . . $77,850

by Sandy

5 months ago

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