Question

need help with accounting

Answer 1

Welcome to Openstudy ;)
May we see it?

Answer 2

not sure what numbers to use for the red parts

Answer 3

Please type the question...

Answer 4

can you see it in the attachments?

Answer 5

Look at income tax payable..the question ask - what is the decrease. right?
Look at the balance sheet -what is the difference between 2103 and 2014 for the income tax payable

Answer 6

so you do not add it?

Answer 7

You need to find the difference

Answer 8

how do i know what to put a parentheses around?

Answer 9

For instance the amounts decreased from 2013 to 2014 - right? but by how much...

Answer 10

or do i not have to do that on the statement since we will be taking the difference already?

Answer 11

Well first we need to review the indirect method. So when you are using this method there are certain items that decrease (neg numbers) and those that increase (add to) the net income in order to get operating activities cash used.

Answer 12

so whatever is negative gets a parentheses right?

Answer 13

If you increase ASSET - you subtract - hence the negative
If you decrease ASSET - you add
if you increase LIABILITIES - you add
if you decrease LIABILITIES - you subtract - hence the negative

Answer 14

So with that information - if your Income tax payable decreased - would you add or subtract THE DIFFERENCE (change) to net income?

Answer 15

Note that you are adjusting the DIFFERENCE or change b/w the two years. You can not add to numbers together in order to find the change

Answer 16

you would add it?

Answer 17

Exactly. So what amount would you add

Answer 18

will you check this for me please, i havent submitted it yet so it being red still is from my previous attempt

Answer 19

You agreed earlier that the decrease in Liabilities meant to ADD the difference, right?

Answer 20

yes

Answer 21

Please go back to my indirect adjustments I typed earlier and apply that. What kind of account is AR?

Answer 22

Accounts Receivable is AR

Answer 23

asset

Answer 24

ok - so yes to the decrease in liabilities, than why do you put parenthesis around your answer? Parenthesis mean you will subtract, right...

Answer 25

it was negative

Answer 26

so what kind of change did AR make from 2013 to 2014?
Do we add or subtract for adjustment

Answer 27

wait would i do 2014- 2013 or 2013-2014

Answer 28

what was negative? if 2013 is $150 and 2014 is $100 - the change is $50

Answer 29

In order to do change - look at prior year to current year - so what happened to an account from 2013 to 2014...dont worry about negative signs on your changes, apply negative signs ONLY to those account that required a subtraction from NI

Answer 30

My bad - your I/C tax payable is correct

Answer 31

AR and Inventory is wrong

Answer 32

for AR i changed it to (14106) and for inventory (18808)

Answer 33

correct

Answer 34

was ap correct?

Answer 35

Yes

Answer 36

okay going to try to fix the rest

Answer 37

ok - let me know if you need more help.

Answer 38

for issuance of common stock i subtracted 2013 32914- 2014's 42318 = -9404
That would get a parenthese right?

Answer 39

or would it not since it increased for 2014?

Answer 40

yes on common stock...

Answer 41

Common stock increased....which is treated as a repurchase of common stock and is a negative cash flow

Answer 42

I just noticed your -9404 for your subtraction...don't worry about the negative sign there - the difference is a change amount, regardless of positive or negative number. Your negative number comes from the concept that I just typed about repurchase of common stock

Answer 43

how does this look?

Answer 44

Looks good to me

Answer 45

yess it was all right. Thank you so much!

Answer 46

You are welcome! Good luck in your studies. I majored in college - accounting and finance.

Answer 47

thank you, acct gets confusing sometimes just takes a bit of work