The net income reported on the income statement for the current year was $250,800. Depreciation recorded on
Question:
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The net income reported on the income statement for the current year was $250,800. Depreciation recorded on equipment and a building amounted to $53,500 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:
| Cash | Accounts receivable (net) | Inventories | Prepaid expenses | Accounts payable (merchandise creditors) | Salaries payable |
Beginning of Year | $44,200 | 67,000 | 112,600 | 6,000 | 67,500 | 7,900 |
End of Year | $42,000 | 65,400 | 125,900 | 5,800 | 61,400 | 8,300 |
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Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method.
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If the direct method had been used, would the net cash flow from operating activities have been the same? Explain
Cornerstones of Managerial Accounting
ISBN: 978-0176530884
2nd Canadian edition
Authors: Maryanne M. Mowen, Don Hanson, Dan L. Heitger, David McConomy, Jeffrey Pittman