Adjustments to Cash Flows from Operations (Indirect Method)
Response to the following problem:
Assume that you are using the indirect method of preparing a statement of cash flows. For each of the changes listed, indicate whether it would be added to or subtracted from net income in computing net cash flows provided by (used in) operating activities. If the change does not affect net cash flows provided by (used in) operating activities, so indicate
1. Increase in Accounts Receivable (net)
2. Decrease in Accounts Payable
3. Increase in securities classified as cash equivalents
4. Gain on sale of equipment
5. Decrease in Inventory
6. Increase in Prepaid Insurance
7. Depreciation
8. Increase in Wages Payable
9. Decrease in Dividends Payable
10. Decrease in Interest Receivable