6. New Vision Company completed its income statement and balance sheet and provided the following information:

Service Revenue				$	67,500
Expenses:
Salaries and Wages	$	43,500
Depreciation		7,450
Utilities		6,750
Office		1,850			59,550
Net Income				$	7,950
Decrease in Accounts Receivable	$	13,500
Paid cash for equipment		5,750
Increase in Salaries and Wages Payable		9,750
Decrease in Accounts Payable		4,625

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 (increase/decrease) would operating cash flows change?

NEW VISION COMPANY Cash Flows from Operating Activities-Direct Method