32 Omega Company's accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands): INCOME STATEMENT Sales revenue Expenses Cost of goods sold Depreciation expense Salaries expense Rent expense Insurance expense Utilities expense Interest expense on bonds Loss on sale of investments Net loss SELECTED BALANCE SHEET ACCOUNTS Merchandise inventory Accounts receivable Accounts payable Salaries payable Rent payable Prepaid rent Prepaid insurance Current Year $89 440 247 40 7 6 24 Prior Year $9,080 2,970 4,140 2,890 1,010 $69 533 231 16 14 9 770 800 750 $ 20,740 22,410 (1,670) Other Data: The company issued $20,000, 8 percent bonds payable at par during the year. Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. 2. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

32 Omega Company's accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands): INCOME STATEMENT Sales revenue Expenses Cost of goods sold Depreciation expense Salaries expense Rent expense Insurance expense Utilities expense Interest expense on bonds Loss on sale of investments Net loss SELECTED BALANCE SHEET ACCOUNTS Merchandise inventory Accounts receivable Accounts payable Salaries payable Rent payable Prepaid rent Prepaid insurance Current Year $89 440 247 40 7 6 24 Prior Year $9,080 2,970 4,140 2,890 1,010 $69 533 231 16 14 9 770 800 750 $ 20,740 22,410 (1,670) Other Data: The company issued $20,000, 8 percent bonds payable at par during the year. Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. 2. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter16: Financial Statement Analysis

Section: Chapter Questions

Problem 9BE

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