Indicate whether each of the following is a source of cash or use of cash Depreciation...

Indicate whether each of the following is a source of cash or use of cash

Depreciation expense
The sale of production equipment at the end of its useful life
Dividends paid to shareholders
An increase in account payable
An increase in inventory
The sale of securities held for investment
The repayment of borrowed capital
The amortization of intangibles
An increase in the Deferred Taxes account

Solutions

Expert Solution


Depreciation expense	Neither a source of cash Nor a use of cash
The sale of production equipment at the end of its useful life	Source of Cash
Dividend paid to shareholders	Use of Cash
Increase in Accounts Payable	Source of Cash
Increase in Inventory	Use of Cash
Sale of securities held for Investment	Source of Cash
Repayment of borrowed capital	Use of Cash
Amortization of Intangibles	Neither a source of cash Nor a use of cash
Increase in Deferred tax account(Note)	Source of Cash/Use of cash

Note:
If there is an increase in Deferred tax liability or decrease in Deferred tax assets then it can be called as Source of cash
If there is an decrease in Deferred tax liability or increase in Deferred tax assets then it can be called as use of cash

ekkarill92 answered 1 year ago

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