Operating activities—indirect method (Learning Objective 3) 10–15 min.

The accounting records of Elite Talent Agency reveal:

$40,000 3,000 13,000 24,000 2,000 15,000 39,000 Net Income ...........................................................................................................

Depreciation Expense............................................................................................

Sales Revenue.......................................................................................................

Decrease in current liabilities ................................................................................

Loss on sale of land ..............................................................................................

Increase in current assets other than Cash ...........................................................

Acquisition of land ................................................................................................

Requirements 1. Compute cash flows from operating activities by the indirect method. Use the format of the operating activities section shown in Exhibit 11-3.

2. Evaluate the operating cash flow of Elite Talent Agency. Give the reason for your evaluation.

AppendixLO1