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Unformatted text preview: the salary to her spouse and children, has the impact of reducing the net income. 4 The personal income taxes paid by Morris family members, should not be part of the printing shop expense. This has the effect of reducing the net income. 5 The printing machine expense, should be depreciated over the life of the asset, instead of charging of the assets in the first year itself. Part B The net cash flow generated by the business is higher as compared to the net income reported by Morris. The lower net income is due to the high amount of personal expenses charged to income statement and charging off the printing machine value in the first year itself....
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- Spring '10