he cash flows from (used for) operating activities are reported by the direct method on the statement of cash flows. Determine the following: a. If sales for the current year were $558,800 and accounts receivable decreased by $39,700 during the year, what was the amount of cash received from customers? $fill in the blank 1 b. If income tax expense for the current year was $38,900 and income tax payable decreased by $4,500 during the year, what was the amount of cash paid for income taxes? $fill in the blank 2 c. Briefly explain why the cash received from customers in part (a) is different from sales. Because the customers paid than the amount of sales for the period, cash received from customers sales made on account by $39,700 during the current year.
The
a. If sales for the current year were $558,800 and
$fill in the blank 1
b. If income tax expense for the current year was $38,900 and income tax payable decreased by $4,500 during the year, what was the amount of cash paid for income taxes?
$fill in the blank 2
c. Briefly explain why the cash received from customers in part (a) is different from sales.
Because the customers paid
than the amount of sales for the period, cash received from customers
sales made on account by $39,700 during the current year.
Cash flow from operating activities indicates the cash inflow or outflow transactions related to the business operation. It can be prepared using the direct or indirect method. Basically, the cash flow from operating activities is a part of the cash flow statement of the company. It is a mandatory statement prepared under the financial statements of the company.
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