An accountant for Farve Enterprise Companies (FEC) computed the following information by making comparisons between FEC’s 2017 and 2016 balance sheets. Further information was determined by examining the company’s 2017 income statement.
1. The amount of an increase in the balance of a Prepaid Rent account.
2. The amount of an increase in the balance of a Treasury Stock account.
3. The amount of a decrease in the balance of the account.
4. The amount of a gain arising from the sale of land.
5. The amount of an increase in the balance of the Salaries Payable account.
6. The amount of an increase in the balance of the Bonds Payable account.
7. The amount of depreciation expense shown on the income statement.
8. The amount of cash dividends paid to the stockholders.
9. The amount of an increase in the balance of an Unearned Revenue account.
10. The amount of a decrease in the balance of an Inventory account.
11. The amount of a decrease in the balance of a Land account.
Required
For each item described above, indicate whether the amount should be added to or subtracted from the amount of net income when determining the amount of net cash flow from operating activities using the indirect method. Also identify any items that do not affect net cash flow from operating activities because they are reported as investing or financing activities.
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