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Required Information [The following information applies to the questions displayed below.) Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method.
Required Information [The following information applies to the questions displayed below.) Green Brands, Inc. (GBI) presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from GBI's Year 2 and Year 1 year-end balance sheets: Account Title Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue Year 2 $ 23,400 57,600 16,400 23,400 4,950 700 Year 1 $ 30,000 50,400 27,300 19,800 4,150 2,950 The Year 2 income statement is shown next: 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 $ 610,000 (373,000) 237,000 4,200 (39,000) (151,000) (5,300) 45,900 4,900 $ 50,800 Required a. Prepare the operating activities section of the statement of cash flows using the direct method for Year 2. (Amounts to be deducted should be Indicated with a minus sign.) GREEN BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash collections from customers for sales Cash collections from customers for services Cash payments for: Net cash flow from operating activities $ 0 b. Prepare the operating activities section of the statement of cash flows using the indirect method for Year 2. (Amounts to be deducted should be Indicated with a minus slgn.) GREEN BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct: Add: noncash expenses Net cash flow from operating activities $ 0
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