For Each of the Following Transactions, Determine What Adjustments Are

question 109

Essay

For each of the following transactions, determine what adjustments are necessary to prepare the statement of cash flows using the indirect method.
a. Firm A sells equipment with a cost of $2,000 and accumulated depreciation of $1,000 for $600 cash.
b. Firm A uses the equity method to record its investment in Firm B. In the current year, A records $1,500 as equity in earnings of affiliate. A also received $1,600 in dividends from B in the current year.
c. Firm A converts $50,000 of debt to common stock. Firm A chooses to report this transaction in the statement of cash flows.

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Definitions:

PowerPoint

A presentation program developed by Microsoft, used to create visual aids for presentations by combining text, graphics, and multimedia.

Slideware

Generic term for presentation software such as PowerPoint and Keynote.

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Studies based on the observation of behaviors, not necessarily as in-depth as ethnographies.

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