Curwen Inc. reportednet cash flow from operating activities of $180,900 on itsstatement of cash...Curwen...

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Accounting

Curwen Inc. reportednet cash flow from operating activities of $180,900 on itsstatement of cash flows for a recent year ended December 31. Thefollowing information was reported in the Cash flows from operatingactivities section of the statement of cash flows, using theindirect method:
Decrease in income taxes payable $4,100
Decrease in inventories 10,200
Depreciation 15,700
Gain on sale of investments 7,100
Increase in accounts payable 2,800
Increase in prepaid expenses 1,700
Increase in accounts receivable 7,700
a.Determine the net income reported by Curwen Inc. for the year endedDecember 31.
$
b.Curwen’s net income differed from cash flows from operationsbecause of the following:
Depreciation expense, which has no effect on cash flows fromoperating activities.
Gain on the sale of investments is reported in investingactivities section of the cash flow statement.
Changes in current operating assets and liabilities that areadded or deducted, depending on their effect on cash flow but notin the income statement.
Operating expenses are deducted from income but are added inthe cash flow statement.
Dividends are deducted from the investing activities in cashflow statement but are a charge against income in the incomestatement.

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4.4 Ratings (801 Votes)

Req a - Net Income $165,700

	Curwen Inc.
	Cashflow Statement - Indirect method

	Cash flows from Operating Activities
	Net cash flow from operating activities	180,900
	Non cash adjustments
	Depreciation expense	(15,700)
	Changes in current operating assets and liabilities
	Increase in accounts receivable	7,700
	Decrease in inventories	(10,200)
	Increase in prepaid expenses	1,700
	Increase in accounts payable	(2,800)
	Decrease in income taxes payable	4,100
	Net Income	165,700

	Req b
	Curwen’s net income differed from cash flows from operations because of the following:
1	Depreciation expense, which has no effect on cash flows from operating activities
3	Changes in current operating assets and liabilities that are added or deducted,
	depending on their effect on cash flow but not in the income statement.

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Transcribed Image Text

In: AccountingCurwen Inc. reportednet cash flow from operating activities of $180,900 on itsstatement of cash...Curwen Inc. reportednet cash flow from operating activities of $180,900 on itsstatement of cash flows for a recent year ended December 31. Thefollowing information was reported in the Cash flows from operatingactivities section of the statement of cash flows, using theindirect method:Decrease in income taxes payable$4,100Decrease in inventories10,200Depreciation15,700Gain on sale of investments7,100Increase in accounts payable2,800Increase in prepaid expenses1,700Increase in accounts receivable7,700a.Determine the net income reported by Curwen Inc. for the year endedDecember 31.$b.Curwen’s net income differed from cash flows from operationsbecause of the following:Depreciation expense, which has no effect on cash flows fromoperating activities.Gain on the sale of investments is reported in investingactivities section of the cash flow statement.Changes in current operating assets and liabilities that areadded or deducted, depending on their effect on cash flow but notin the income statement.Operating expenses are deducted from income but are added inthe cash flow statement.Dividends are deducted from the investing activities in cashflow statement but are a charge against income in the incomestatement.

Decrease in income taxes payable	$4,100
Decrease in inventories	10,200
Depreciation	15,700
Gain on sale of investments	7,100
Increase in accounts payable	2,800
Increase in prepaid expenses	1,700
Increase in accounts receivable	7,700