Answered step by step
Verified Expert Solution
Link Copied!
Question
1 Approved Answer

Omega Company's accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands): INCOME

Omega Company's accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands):

INCOME STATEMENT
Sales revenue $ 20,730
Expenses
Cost of goods sold $ 9,170
Depreciation expense 3,100
Salaries expense 4,080
Rent expense 2,940
Insurance expense 930
Utilities expense 920
Interest expense on bonds 1,000
Loss on sale of investments 750 22,890
Net loss $ (2,160 )

SELECTED BALANCE SHEET ACCOUNTS
Current Year Prior Year
Merchandise inventory $ 89 $ 69
Accounts receivable 457 531
Accounts payable 246 216
Salaries payable 35 19
Rent payable 7 14
Prepaid rent 15 18
Prepaid insurance 30 10

Other Data:

The company issued $25,000, 8 percent bonds payable at par during the year.

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. (List cash outflows as negative amounts. Enter your answers in thousands.)

2. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method. (List cash outflows and losses as negative amounts. Enter your answers in thousands.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image
Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting The Basis For Business Decisions

Authors: Robert F. Meigs, Walter B Meigs

5th Edition

007041551X, 9780070415515

More Books

Students explore these related Accounting questions