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The net income reported on an income statement for the current year was $250,000. Depreciation recorded on fixed assets for the year was $45,500. Balances
The net income reported on an income statement for the current year was $250,000. Depreciation recorded on fixed assets for the year was $45,500. Balances of the current asset and current liability accounts at the end and beginning of the year are listed below.
Ending Beginning
Cash $56,000 $59,500
Accounts receivable (net) 71,000 73,400
Inventories 140,000 126,500
Prepaid expenses 7,800 8,400
Accounts payable 62,600 66,400
Cash dividends payable 4,500 7,000
Salaries payable 9,000 8,250
- Prepare the cash flows from operating activities section of a statement of cash flows using the indirect method.
- If the direct method had been required for this problem, would the net cash flows from operating activities have been the same? Explain,
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