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The following accounts and corresponding balances were drawn from Crimson Sports 2017 and 2016 year-end balane sheets A. Prepare the operating activities section of the
The following accounts and corresponding balances were drawn from Crimson Sports 2017 and 2016 year-end balane sheets
A. Prepare the operating activities section of the statement of cash flows using the direct method
B. Prepare the operating activities section of the statement of cash flows using the indirect method
1. Dividends paid during the period amounted to $50,000. 2. There were no bond liabilities repaid during the period. Required al Compute the amount of cash flow associated with the issue of bond liabilities. b. Compute the amount of cash flow associated with the issue of common stock. c. Prepare the financing activities section of the statement of cash flows. ---SERIES B -1, 14-2 Problem 14-14B The direct versus the indirect method of determining cash flows from operating activities The following accounts and corresponding balances were drawn from Crimson Sports, Inc.'s 2017 and 2016 year-end balance sheets: Account Title 2017 2016 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $31,000 70,000 25,000 18,000 5,100 10,200 $36,000 65,000 24,000 20,000 4,500 9,500 The 2017 income statement is shown below: Income Statement Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of equipment Net income $ 495,000 (215,000) 280,000 20,000 (42,000) (122,000) (12,000) 124,000 1,500 $ 125,500 Required a. Prepare the operating activities section of the statement of cash flows using the direct method. b. Prepare the operating activities section of the statement of cash flows using the indirect methodStep by Step Solution
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