Exercise 12-4A (Algo) Use the direct method to determine cash flows from operating activities LO 12-2 The following accounts and corresponding balances were drawn from Avia Company's Year 2 and Year 1 year-end balance sheets Year 2 Year 1 56,900 $4,000 Account Title Unearned revenue Prepaid rent During the year, $81.000 of uneared revenue was recognized as having been earned. Rent expense for Year 2 was $24.500 Required Based on this information alone, prepare the operating activities section of the statement of cash flows assuming the direct approach is used. (Amounts to be deducted should be indicated with a minus sign) Cash fow from coeating activities Niet cash foie tron operating activities S

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Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is