COMMERCE 1AA3 Lecture Notes - Lecture 8: Accounts Receivable, Current Liability
12 Oct 2017
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Lecture 8: rationale for adjusting net income to cfo (cash ow for operating activities): if an item causes the net income to be greater than net income, that item must be. If an item causes net income to be less than cash income, that item must be added: depreciation causes net income to be less than cash income. Added to net income: losses on sale of assets cause net income to be less than cash income. Therefore, they are added to net income: gains on sale of assets cause net income to be less than cash income. Therefore, they are subtracted to net income: bv = cost - ad, gain (loss) = sales price - bv, depreciation expense ,000. Change in the asset = 227,000 - 181,000 = ,000. Acquisition of the asset = 46,000 + 20,000 = ,000: the rationale for adjustment of changes in current assets: on december 31, 2017 a company purchases an insurance policy for ,000.
