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Assuming the Use of the Indirect Method to Prepare the Statement

question 5

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Assuming the use of the indirect method to prepare the statement of cash flows,indicate whether each of the following items would be added to net income,subtracted from net income,or not included in the operating activities section.Use the letters "A" for added,"S" for subtracted,or "N" for not included in the operating activities section.
 Answers  a.  Increase in Treasury Stock  b.  Decrease in Interest Payable  c.  Increase in Unearned Revenue  d.  Increase in Bonds Payable  e.  Decrease in Treasury Stock  f.  Increase in Inventory  g.  Decrease in Marketable Securities (Available for  sale securities)  h.  Gain on Sale of Land  i.  Increase in Buildings  j.  Decrease in Supplies \begin{array} { | l | l | l | } \hline & & \text { Answers } \\\hline \text { a. } & \text { Increase in Treasury Stock } & \\\hline \text { b. } & \text { Decrease in Interest Payable } & \\\hline \text { c. } & \text { Increase in Unearned Revenue } & \\\hline \text { d. } & \text { Increase in Bonds Payable } & \\\hline \text { e. } & \text { Decrease in Treasury Stock } & \\\hline \text { f. } & \text { Increase in Inventory } & \\\hline \text { g. } & \begin{array} { l } \text { Decrease in Marketable Securities (Available for } \\\text { sale securities) }\end{array} & \\\hline \text { h. } & \text { Gain on Sale of Land } & \\\hline \text { i. } & \text { Increase in Buildings } & \\\hline \text { j. } & \text { Decrease in Supplies } & \\\hline\end{array}

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Definitions:

Unit Product Cost

The cost allocated to a single unit of product, encompassing direct materials, direct labor, and allocated overhead costs.

Income Statement

A financial report outlining the revenues, expenses, and profits or losses of a company over a specific period.

Fixed Manufacturing Overhead

Costs associated with production that do not change with the level of output, such as rent for factory facilities or salaries of permanent staff.

Direct Materials

Raw materials that are traceable to the product and included in the direct costs of manufacturing.

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