Exhibit 21-2 In preparation for completing the statement of cash flows using the spreadsheet method, Williams Company provided the following information relating to patents for 2014:

-Refer to Exhibit 21-2. The Cash Flows from Operating Activities section prepared using the indirect method would include which of the following deductions or add-back amounts related to patents?
A) $(310)
B) $(290)
C) $ 290
D) $ 600

Question

Exhibit 21-2 In preparation for completing the statement of cash flows using the spreadsheet method, Williams Company provided the following information relating to patents for 2014:

-Refer to Exhibit 21-2. The Cash Flows from Operating Activities section prepared using the indirect method would include which of the following deductions or add-back amounts related to patents?
A) $(310) 
B) $(290) 
C) $ 290 
D) $ 600

Quizplus · Accepted Answer

The indirect method requires adding back depreciation and amortization expense to net income. Patents are amortized, so $290 would be added back to net income.

Exhibit 21-2 in Preparation for Completing the Statement of Cash