Suppose your company sells goods for $390, of which $245 is received in cash and $145 is on account. The goods cost your company $143 and were paid for in a previous period. Your company also recorded salaries and wages of $115, of which only $39 has been paid in cash

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1.

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.)

1

Record the sales revenue of $245 for cash and $145 on account and record the cost of goods sold of $143 using one journal entry.

2

Record the salaries and wages expense of $115

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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.

Net income=

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
Increase in Accounts Receivable
Decrease in Inventory
Increase in Salaries and Wages Payable
Net Cash Flow from Operating Activities

+

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