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

Required:

Complete the following income statement for Electronic Transformations. Assume all accounts payable are to suppliers.

Net sales
± Change in accounts receivable  .................... _______
= Cash received from customers ...................... _______
Operating expenses
± Change in accounts payable ......................... _______
= Cash paid for operating expenses .............. _______
Income tax expense
± Change in income tax payable .................... _______
= Cash paid for income taxes .......................... _______

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Cash Flows from Operating Activities (Indirect method) Net income $36,000 Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense 9,000 Increase in accounts receivable (13,000) Increase in accounts payable 8,000 Increase in income tax payable 6,000 Net cash flows from operating activities $46,000 Cash Flows from Operating Activities (Direct method) $ 83,000 (26,000) (11,000) Cash received from customers Cash paid for operating expenses Cash paid for income taxes Net cash flows from operating activities $46,000