The Net Income Reported on an Income Statement for the Current

question 70

Essay

The net income reported on an income statement for the current year was $63,000.Depreciation recorded on fixed assets for the year was $24,000.Balances of the current asset and current liability accounts at the end and beginning of the year are listed below.Prepare the Cash Flows from Operating Activities section of the statement of cash flows using the indirect method.

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Definitions:

Efficiency Variance

The difference between the actual costs incurred and the standard costs for the actual level of production activity, indicating efficiency in resource usage.

Direct Materials

Raw materials that are directly incorporated into a finished product and can easily be traced to it.

Planning Budget

A budget prepared to anticipate the future financial position, operations, and resources of an entity based on expected income and expenses.

Facility Expenses

Costs related to the physical premises where business activities occur, including rent, utilities, and maintenance.