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1. Calculate cash flows from operating activities by the direct method. Also evaluate Jones Companys operating cash flow. Give the reason for your evaluation Exercise

1. Calculate cash flows from operating activities by the direct method. Also evaluate Jones Companys operating cash flow. Give the reason for your evaluation

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Exercise 3Callate Cash Flows from Operating Activities-Direct Method The accounting records of Jones Company reveal the following: $47,000 Net income Payment of Salaries and Wages Depreciation Expense Decrease in current liabilites Increase in current assets other than cash Payment of dividends Collection of accounts receivable S 40,000 16,000 12,000 8,000 73,000 7,000 25,000 61,000 23,000 Payment of income tax 18,000 Collection of dividend revenue 21,000 Payment of interest 9,000 Cash sales 86,000 Gain on sale of land Acquisition of land with cash Payment of accounts payable Requirement Calculate cash flows from operating activities by the direct method. Also evaluate Jones Company's operating cash flow. Give the reason for your evaluation. 1

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