Use the information below to answer the following question(s):Howard Co. uses the direct method to prepare its operating activities section of the statement of cash flows. Indicate how each event affects net income and the three types of activities on the statement of cash flows. In the net income column, use the letter "I" to indicate increase, the letter "D" to indicate decrease, and the letters "NA" to indicate no effect on net income. In the three cash flow columns, use the letter "I" to indicate cash inflow, the letter "D" to indicate cash outflow, and the letters "NA" to indicate no effect on cash flows.On January 1 of the current year, Howard Co. paid $10,000 to the Citizens Bank for accrued interest expense that had been accrued at the end of the previous year.
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What will be an ideal response?
(NA) (D) (NA) (NA)
Cash paid for interest is a cash outflow reported in the operating activities section of the statement of cash flows. Because the interest had already been accrued (that is, it was expensed in the previous year), it does not affect net income in the current year.
Business
src="https://sciemce.com/media/4/ppg__10826191638__f1q9g1.jpg" alt="" style="vertical-align: 0.0px;" height="66" width="467" />
What will be an ideal response?
(NA) (D) (NA) (NA)
Cash paid for interest is a cash outflow reported in the operating activities section of the statement of cash flows. Because the interest had already been accrued (that is, it was expensed in the previous year), it does not affect net income in the current year.
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