Assume that Ames Companys net income of $151,000 in BE5.16 was based on sales of $600,000, cost

Question:

Assume that Ames Company’s net income of $151,000 in BE5.16 was based on sales of $600,000, cost of goods sold of $200,000, salaries and wages of $157,000, depreciation expense of $44,000, and income tax expense of $48,000. Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

BE5.16

Ames Company reported 2020 net income of $151,000. During 2020, accounts receivable increased by $15,000 and accounts payable increased by $9,000. Depreciation expense was $44,000. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

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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