Forward Advance Systems Inc. reported the following information for Years 1 and 2: Line Item Description Year 1 Year 2 Accounts receivable $100,000 $93,000 Prepaid expenses 5,000 6,000 Accounts payable 71,000 76,000 Salaries payable 5,000 4,000 Net income 68,000 Loss on sale of equipment 5,000 Depreciation expense 11,000 If Forward Advance Systems uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash from operating activities for Year 2? a. $94,000 b. $98,000 c. $72,000

Forward Advance Systems Inc. reported the following information for Years 1 and 2: Line Item Description Year 1 Year 2 Accounts receivable $100,000 $93,000 Prepaid expenses 5,000 6,000 Accounts payable 71,000 76,000 Salaries payable 5,000 4,000 Net income 68,000 Loss on sale of equipment 5,000 Depreciation expense 11,000 If Forward Advance Systems uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash from operating activities for Year 2? a. $94,000 b. $98,000 c. $72,000

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter11: Long-term Assets

Section: Chapter Questions

Problem 5EA: Steele Corp. purchases equipment for $25,000. Regarding the purchase, Steele recorded the following...

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Forward Advance Systems Inc. reported the following information for Years 1 and 2:

Line Item Description	Year 1	Year 2
Accounts receivable	$100,000	$93,000
Prepaid expenses	5,000	6,000
Accounts payable	71,000	76,000
Salaries payable	5,000	4,000
Net income		68,000
Loss on sale of equipment		5,000
Depreciation expense		11,000

If Forward Advance Systems uses the indirect method to prepare the operating activities section of the statement of cash flows, what amount will be reported as net cash from operating activities for Year 2?

a. $94,000

b. $98,000

c. $72,000

d. $78,000

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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