Question
The Net Income reported on the income statement for the current year was $500,000. Depreciation recorded on store equipment for the year was $25,000. There
The Net Income reported on the income statement for the current year was $500,000. Depreciation recorded on store equipment for the year was $25,000. There was a Loss on sale of investments of $10,000 and a gain of sale of equipment of $15,000. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $97,000 $104,000 Accounts receivable 108,000 112,500 Inventory 212,000 200,000 Prepaid Expenses 15,000 12,000 Accounts payable 108,000 115,000 Wages Payable 20,000 15,000
a) Using the indirect method, prepare the cash flows from operating activities section of the statement of cash flows.
b) Would the net cash flow from operating activities be the same if the direct method had been used?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started