Cash flows from operating activities for both the indirect and direct methods are presented for Electronic Transformations.

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Cash flows from operating activities for both the indirect and direct methods are presented for Electronic Transformations.
Cash Flows from Operating Activities (Indirect method)
Net income ..............................................................$35,000
Adjustments for noncash effects:
Depreciation expense ...................................................8,000
Changes in current assets and current liabilities:
Increase in accounts receivable ......................................(12,000)
Increase in accounts payable ............................................7,000
Increase in income tax payable .........................................5,000
Net cash flows from operating activities ............................................$43,000
Cash Flows from Operating Activities (Direct method)
Cash received from customers .......................................$78,000
Cash paid for operating expenses ...................................(25,000)
Cash paid for income taxes ..........................................(10,000)
Net cash flows from operating activities .............................................$43,000
Required:
Complete the following income statement for Electronic Transformations. Assume all accounts payable are to suppliers.
ELECTRONIC TRANSFORMATIONS
Income Statement
For the year ended December 31, 2012
Revenues .................................................................$ ?
Expenses:
Operating expenses ................................$ ?
Depreciation expense ...........................8,000
Income tax expense ..................................?
Total expenses .......................................................?
Net income ........................................................$35,000
Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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Financial Accounting

ISBN: 9780078110825

2nd Edition

Authors: J. David Spiceland, Wayne Thomas, Don Herrmann

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