Question
The net income reported on the income statement for the current year was $330,400. Depreciation recorded on equipment and a building amounted to $105,140 for
The net income reported on the income statement for the current year was $330,400. Depreciation recorded on equipment and a building amounted to $105,140 for the year. 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 | $89,900 | $95,010 |
Accounts receivable (net) | 111,940 | 117,700 |
Inventories | 217,550 | 209,050 |
Prepaid expenses | 13,290 | 14,160 |
Accounts payable (merchandise creditors) | 95,060 | 103,580 |
Salaries payable | 15,590 | 13,710 |
Required:
A. | Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. | ||||||||||||||||||||||||||||||||||||||||||||||
B. | If the direct method had been used, would the net cash flow from operating activities have been the same?
A. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required.
|
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started