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 the following transactions:
Definitions:
Oral Contracts
Agreements that are made verbally and not recorded in a written document, but are still legally binding.
Written Ones
Documents or agreements that are formally inscribed or recorded in written form.
Accord and Satisfaction
A legal settlement where a debtor offers payment less than the amount owed, and the creditor accepts this payment as full settlement of the debt.
Rescission
The legal act of cancelling a contract and returning all involved parties to their state prior to the agreement, often due to misrepresentation, fraud, or mistake.
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