Avatar Company Uses the Indirect Method to Prepare Its Statement

question 50

Essay

Avatar Company uses the indirect method to prepare its statement of cash flows. Using the worksheet shown below, please enter the adjustments needed to record depreciation expense for the year of 2014 of $12,000.

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Definitions:

State Agency

An organization established by a state government to carry out specific functions, such as regulating industries or providing services.

Intellectual Property

Property that results from intellectual, creative processes. Copyrights, patents, and trademarks are examples of intellectual property.

Trademark

A distinctive mark, motto, device, or emblem that a manufacturer stamps, prints, or otherwise affixes to the goods it produces so that they can be identified on the market and their origins made known. Once a trademark is established (under common law or through registration), the owner is entitled to its exclusive use.

Patent

A government grant that gives an inventor the exclusive right or privilege to make, use, or sell an invention for a limited time period.