ales $570,960 ost of merchandise sold 324,190 ross profit $246,770 perating expenses: Depreciation expense $43,810 Other operating expenses 115,830 Total operating expenses 159,640 ncome before income tax $87,130 ncome tax expense 24,180 et income $62,950 hanges in the balances of selected accounts from the beginning to the end of the current year are as follows: Increase Decrease ccounts receivable (net) S(12,650) ventories 4,410 repaid expenses (4,220) ccounts payable (merchandise creditors) (9,000) cerued expenses payable (operating expenses) 1,260 mcome tax payable (3,020) Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any ne Booker T Industries Inc. Cash Flows from Operating Activities Section For the year ended on June 30 Cash flows from (used for) operating activities: Net cash flow from operating activities What does the direct method show about a company's cash flows from operating activities that is not shown using the indirect method? With the the cash received ess the cash naid is the net cash flows from operating activities TndSividual cash neceints and navments are renorted in ash Flows from (used for) Operating Acti
ales $570,960 ost of merchandise sold 324,190 ross profit $246,770 perating expenses: Depreciation expense $43,810 Other operating expenses 115,830 Total operating expenses 159,640 ncome before income tax $87,130 ncome tax expense 24,180 et income $62,950 hanges in the balances of selected accounts from the beginning to the end of the current year are as follows: Increase Decrease ccounts receivable (net) S(12,650) ventories 4,410 repaid expenses (4,220) ccounts payable (merchandise creditors) (9,000) cerued expenses payable (operating expenses) 1,260 mcome tax payable (3,020) Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any ne Booker T Industries Inc. Cash Flows from Operating Activities Section For the year ended on June 30 Cash flows from (used for) operating activities: Net cash flow from operating activities What does the direct method show about a company's cash flows from operating activities that is not shown using the indirect method? With the the cash received ess the cash naid is the net cash flows from operating activities TndSividual cash neceints and navments are renorted in ash Flows from (used for) Operating Acti
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:The income statement of Booker T Industries Inc. for the current year ended June 30 is as follows:
Sales
$570,960
Cost of merchandise sold
324,190
Gross profit
$246,770
Operating expenses:
Depreciation expense
$43,810
Other operating expenses
115,830
Total operating expenses
159,640
Income before income tax
S87,130
Income tax expense
24,180
Net income
$62,950
Changes in the balances of selected accounts from the beginning to the end of the current year are as follows:
Increase
Decrease
Accounts receivable (net)
S(12,650)
Inventories
4,410
Prepaid expenses
(4,220)
Accounts payable (merchandise creditors)
(9,000)
Accrued expenses payable (operating expenses)
1,260
Income tax payable
(3,020)
a. Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Booker T Industries Inc.
Cash Flows from Operating Activities Section
For the year ended on June 30
Cash flows from (used for) operating activities:
Net cash flow from operating activities
b. What does the direct method show about a company's cash flows from operating activities that is not shown using the indirect method?
With the
, the cash received less the cash paid is the net cash flows from operating activities. Individual cash receipts and payments are reported in the Cash Flows from (used for) Operating Activities section.
The
adjusts accrual basis net income for revenues and expenses that do not involve the receipt or payment of cash to arrive at net cash flows from operating activities.
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