Would be included in the operating section of its

would be included in the operating section of its 2014 indirect method
statement of cash flows?
Add increase in inventory $5,000
Subtract increase in inventory $5,000
Add inventory balance $20,000
Subtract inventory balance $20,000
Answer
Subtract increase in inventory $5,000
Consider the same scenario as in the previous question: On March 31, 2015,
Cars, Inc. owes Preston Devices, one of its suppliers, $25,000 for previous
purchases. During April 2015, Preston sells Cars devices with a sales price of
$10,000 and a cost to Preston of $8,000. During April, Cars pays Preston
$12,000 against the amount owed to Preston. If Preston had no other sales and
records no other collections from customers during the month of April, the
operating section of Preston's indirect method statement of cash flows for April
will show the following de-accrual adjustments to net income:
Annie's Fitness sells a set of free weights to a customer for $1,000. The
customer pays $600 in cash and puts the rest on her store credit account.
Which one of the following statements describes the most appropriate
accounting for the transaction?

Sardi Company estimates its 2015 tax expense to be $80,000. It makes a
cash payment of $20,000 to the tax authorities on December 31, 2015. How
should this transaction be recorded by Sardi?
Online Harvard Quiz 40