Refer to the information for New Vision Company in E12-9. Statement of Cash Flows Method Cash Flows

Question:

Refer to the information for New Vision Company in E12-9.

Statement of

Cash Flows Method

Cash Flows (and Related Changes) Direct Indirect

1. Net income

2. Receipts from customers

3. Accounts receivable increase or decrease

4. Payments to suppliers

5. Inventory increase or decrease

6. Accounts payable increase or decrease

7. Payments to employees

8. Salaries and wages payable, increase or decrease

9. Depreciation expense

10. Cash flows from operating activities

11. Cash flows from investing activities

12. Cash flows from financing activities

13. Net increase or decrease in cash during the period

Required:

1. Present the operating activities section of the statement of cash flows for New Vision Company using the direct method. Assume that Accounts Payable relate to Utilities and Office Expenses on the income statement.

2. If payments for salaries and wages were to increase by 10 percent throughout the year, by what dollar amount and in what direction would operating cash flows change?

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...