Kyle Company reports its income from its investment in Bingham Company under the equity method. Kyle recognized income of $150,000 from its investment in Bingham during the current year. No dividends were declared or paid by Bingham during the year. Kyle would show the $150,000 in its statement of cash flows for the current year prepared under the indirect method as

Question

Quizplus · Accepted Answer

Under the equity method, income recognized from an investment is a non-cash item and should be deducted from net income in the operating activities section of the cash flow statement when using the indirect method.

Kyle Company Reports Its Income from Its Investment in Bingham