The accounting records of The Fenceman, Inc. reveal the following: Net Income ............$ 22,000 Payment of income

Question:

The accounting records of The Fenceman, Inc. reveal the following:

Net Income ............$ 22,000

Payment of income tax ......... 13,000

Collection of dividend revenue .... 7,000

Payment to suppliers ......... 54,000

Collections from customers ....... 102,000

Payment of salaries and wages ..... $34,000

Depreciation ........... 12,000

Payment of interest ........ 16,000

Payment of dividends ........ 7,000

Requirements

1. Compute cash flows from operating activities by the direct method.

2. Evaluate the operating cash flow of The Fenceman, Inc. Give the reason for your evaluation.

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...