Q. a. Describe the three major activities that are reported in cash flow statement.For the year ended June 30, 2011, net income for Silk Corporation was Rs. 7,400. Depreciation expense was Rs. 2,000. During the year, Accounts Receivable increased by Rs. 4,400, Inventories increased by Rs. 7,000, Prepaid Rent decreased by Rs. 1,400, Accounts Payable increased by Rs. 14,000, Salaries Payable increased by Rs. 1,000, and Income Taxes Payable decreased by Rs. 600. Use the indirect method to prepare a schedule of cash flows from operating activities.

The cash flow statement is helpful for the stakeholders that they can identify the organization's…

Answered: Describe the three major activities…

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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Q. a. Describe the three major activities that are reported in cash flow statement.

For the year ended June 30, 2011, net income for Silk Corporation was Rs. 7,400. Depreciation expense was Rs. 2,000. During the year, Accounts Receivable increased by Rs. 4,400, Inventories increased by Rs. 7,000, Prepaid Rent decreased by Rs. 1,400, Accounts Payable increased by Rs. 14,000, Salaries Payable increased by Rs. 1,000, and Income Taxes Payable decreased by Rs. 600. Use the indirect method to prepare a schedule of cash flows from operating activities.

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