Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method: a. Increase in merchandise inventory b. Increase in prepaid expenses c. Depreciation of fixed assets d. Gain on disposal of fixed assets e. Amortization of patent f. Increase in notes payable due in 120 days to vendors g. Increase in accounts payable h. Decrease in wages payable i. Decrease in notes receivable due in 60 days from customers j. Decrease in accounts receivable k. Loss on retirement of long-term debt

The answer is

A - Deducted

B - Deducted

C - Added

D - Deducted

E - Added

F - Added

G - Added

H - Deducted

I - Added

J- Added

K - Added

Explanation:

Rule:

Increase in liability will be added to net income while decrease in liability will deducted from net income.

Increase in asset will be deducted from net income while decrease in asset will be added to net income

A - Deducted

B - Deducted

C - Added

D - Deducted

E - Added

F - Added

G - Added

H - Deducted

I - Added

J- Added

K - Added

a recipe serves 8 people, and calls for 5 lbs of apples and 2 cups of flour. you want to prepare it for 24 people. divide 24 by 8 to get 3, and then multiply your ingredients by 3.

so for 24 people, you'll need 15 lbs of apples, and 6 cups of flour.

u = 30

continuing your method

= +

subtract from both sides

= - thus

= -

= ⇒ u = 30