ACC 252 Chapter Notes - Chapter 12: Accounts Payable, Accounts Receivable, Common Stock
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The most recent comparative balance sheet of Giacomelli Corporation appears below:
Ending Balance | Beginning Balance | |
Assets: | ||
Current assets: | ||
Cash and cash equivalents | $37,000 | $29,000 |
Accounts receivable | 20,000 | 24,000 |
Inventory | 65,000 | 61,000 |
Prepaid expenses | 5,000 | 7,000 |
Total current assets | 127,000 | 121,000 |
Property, plant, and equipment | 424,000 | 399,000 |
Less accumulated depreciation | 231,000 | 200,000 |
Net property, plant, and equipment | 193,000 | 199,000 |
Total assets | $320,000 | $320,000 |
Liabilities and Stockholdersâ Equity | ||
Current liabilities: | ||
Accounts payable | $19,000 | $17,000 |
Accrued liabilities | 58,000 | 51,000 |
Income taxes payable | 47,000 | 42,000 |
Total current liabilities | 124,000 | 110,000 |
Bonds payable | 77,000 | 80,000 |
Total liabilities | 201,000 | 190,000 |
Stockholdersâ equity: | ||
Common stock | 31,000 | 30,000 |
Retained earnings | 88,000 | 100,000 |
Total stockholdersâ equity | 119,000 | 130,000 |
Total liabilities and stockholdersâ equity | $320,000 | $320,000 |
The company uses the indirect method to construct the operating activities section of its statements of cash flows.
Which of the following is correct regarding the operating activities section of the statement of cash flows?
The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be added to net income | ||
The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be added to net income | ||
The change in Prepaid Expenses will be added to net income; The change in Income Taxes Payable will be subtracted from net income | ||
The change in Prepaid Expenses will be subtracted from net income; The change in Income Taxes Payable will be subtracted from net income |