Howard Company Uses the Direct Method to Prepare Its Operating

question 151

Essay

Howard Company uses the direct method to prepare its operating activities section of the statement of cash flows.
Indicate how each event affects net income and the three types of activities on the statement of cash flows. In the net income column, use the letter "I" to indicate increase, the letter "D" to indicate decrease, and the letters "NA" to indicate that the income statement is not affected. In the three cash flow columns, use the letter "I" to indicate cash inflow, the letter "D" to indicate cash outflow, and the letters "NA" to indicate that the cash flow statement is not affected.
Howard Company made a $25,000 cash payment on a term loan. The payment included a $23,000 reduction of principal as well as $2,000 of interest. (Show the combined effects of the events.)

---

Definitions:

Culture Shock

A feeling of disorientation and discomfort that one may experience when exposed to a foreign culture or social environment for the first time.

Sociological Imagination

The ability to see the relationship between individual experiences and the larger society.

Unemployment Rates

The percentage of the labor force that is jobless and actively seeking employment.

Economic Structures

Economic structures refer to the arrangement and organization of economic agents and institutions in a society, including how resources are distributed and managed.