Use the information from E9-21A to prepare the cash from operating activities section of the statement of cash flows using the indirect method. Then, compare it with the statement you prepared for E9-21A. What are the similarities? What are the differences? Which statement do you find mostinformative?

Transcribed Image Text:

Hargrove Dynamics, Inc. Income Statement For the Year Ended December 31, 2011 Sales Cost of goods sold Gross margin Operating expenses Wages... kent. . Utilities Insurance. Net income $120,000 . 40,000 80,000 ...$ 7,500 10,200 4,800 1,500 24,000 56,000 Selected accounts from the balance sheet: Account Accounts receivable Inventory Prepaid insurance Accounts payable Wages payable Utilities payable Beginning of the Year 5,000 32,000 1,500 12,000 1,850 End of the Year $15,000 12,500 500 17,500 1,600 500