Presented below is the income statement of Sandra, Inc.: Sales revenue   $384,000 Cost of goods sold   226,500 Gross profit   $157,500 Operating expenses   96,600 Income before income taxes   60,900 Income taxes   23,800 Net income   $  37,100 In addition, the following information related to net changes in working capital is presented:     Debit   Credit Cash   $13,000     Accounts receivable   26,000     Inventories       $19,400 Salaries payable (operating expenses)   8,200     Accounts payable       13,800 Income taxes payable   2,900     The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $3,000.           A. Prepare a schedule computing the net cash flow from operating activities by using the indirect method that would be shown on a statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -10,000 or in parenthesis e.g. (10,000).)       B.Prepare a schedule computing the net cash flow from operating activities by using the direct method that would be shown on a statement of cash flows

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Presented below is the income statement of Sandra, Inc.:

Sales revenue   $384,000
Cost of goods sold   226,500
Gross profit   $157,500
Operating expenses   96,600
Income before income taxes   60,900
Income taxes   23,800
Net income   $  37,100

In addition, the following information related to net changes in working capital is presented:

    Debit   Credit
Cash   $13,000    
Accounts receivable   26,000    
Inventories       $19,400
Salaries payable (operating expenses)   8,200    
Accounts payable       13,800
Income taxes payable   2,900    

The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $3,000.
 
 
 
 
 
A. Prepare a schedule computing the net cash flow from operating activities by using the indirect method that would be shown on a statement of cash flows. (Show amounts that decrease cash flow with either a - sign e.g. -10,000 or in parenthesis e.g. (10,000).)
 
 
 
B.Prepare a schedule computing the net cash flow from operating activities by using the direct method that would be shown on a statement of cash flows.
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