Required information E12-3 Understanding the Computation of Cash Flows from Operating Activities (Indirect Method) [LO 12-2] [The following information applies to the questions displayed below.] Suppose your company sells services for $375 cash this month. Your company also pays $175 in salaries and wages, which includes $65 that was payable at the end of the previous month and $110 for salaries and wages of this month. E12-3 Part 1 Required: Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

Journal entry worksheet Record the service revenue of $375 for cash. Note: Enter debits before credits. Transaction General Journal Debit Credit Cash 375 Service Revenue 375 Record entry Clear entry View general journal Journal entry worksheet Record the salaries and wages paid of $175. Note: Enter debits before credits. Transaction General Journal Debit Credit 2 Record entry Clear entry View general journal 2. Calculate the amount that should be reported as net cash flow from operating activities 3. Calculate the amount that should be reported as net income 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2) Complete this question by entering your answers in the tabs below Required 2Required 3 Required 4 Calculate the amount that should be reported as net cash flow from operating activities. Required 2 Required 3> 2. Calculate the amount that should be reported as net cash flow from operating activities. 3. Calculate the amount that should be reported as net income 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2) Complete this question by entering your answers in the tabs below Required 2Required 3Required4 Calculate the amount that should be reported as net income Net Income KRequired 2 Required 4> Complete this question by entering your answers in the tabs below Required 2 Required 3 Required 4 Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2). (Amounts to be deducted should be indicated with a minus sign.) Net Income Decrease in Salaries and Wages Payable Net Cash Flow from Operating Activities