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a. Use the direct method to compute the amount of cash inflows from operating activities. b. Use the direct method to compute the amount of cash outflows from operating activities.

a. Use the direct method to compute the amount of cash inflows from operating activities. b. Use the direct method to compute the amount of cash outflows from operating activities.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Exercise 12-5A (Algo) Use the direct method to determine cash flows from operating activities LO 12-2 The following accounts and corresponding balances were drawn from Marinelli Company's Year 2 and Year 1 year-end balance sheets. Year 2 Year 1 $48,200 $39,600 Account Title Accounts receivable Interest receivable Other operating expenses payable Salaries payable The Year 2 income statement is shown next. Income Statement Sales Salary expense. Other operating expenses Operating income Nonoperating items: Interest revenue Net income 4,800 29,900 11,850 a. Cash inflows from operating activities b. Cash outflows from operating activities 6,850 20,900 16,150 $760,000. (169,500) (268,500) 322,000 23,500 $345,500 Required a. Use the direct method to compute the amount of cash inflows from operating activities. b. Use the direct method to compute the amount of cash outflows from operating activities.
Transcribed Image Text:Exercise 12-5A (Algo) Use the direct method to determine cash flows from operating activities LO 12-2 The following accounts and corresponding balances were drawn from Marinelli Company's Year 2 and Year 1 year-end balance sheets. Year 2 Year 1 $48,200 $39,600 Account Title Accounts receivable Interest receivable Other operating expenses payable Salaries payable The Year 2 income statement is shown next. Income Statement Sales Salary expense. Other operating expenses Operating income Nonoperating items: Interest revenue Net income 4,800 29,900 11,850 a. Cash inflows from operating activities b. Cash outflows from operating activities 6,850 20,900 16,150 $760,000. (169,500) (268,500) 322,000 23,500 $345,500 Required a. Use the direct method to compute the amount of cash inflows from operating activities. b. Use the direct method to compute the amount of cash outflows from operating activities.
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