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( ANSWER QUESTION WITH DIRECT METHOD ) ( NOT INDIRECT METHOD ) LAG Network Inc. ' s balance sheet and income statement are as follows:
ANSWER QUESTION WITH DIRECT METHODNOT INDIRECT METHOD
LAG Network Inc.s balance sheet and income statement are as follows:
Additional information regarding LAG Network Inc.s activities during :
a Equipment is purchased for $ cash.
b common shares are issued for cash at $ per share.
c Declared and paid $ of cash dividends during the year.
Other information regarding LAG Network Inc.:
a All sales are credit sales.
b All credits to accounts receivable are receipts from customers.
c All purchases of merchandise are on credit.
d All debits to accounts payable result from payments for merchandise.
e Other operating expenses are cash expenses.
f The only decrease in income taxes payable is for payment of taxes.
Required:
Prepare a statement of cash flows for using the DIRECT METHOD to report cash inflows and outflows from operating activities. List
any deduction in cash and cash outflows as negative amounts.
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