The following accounts and corresponding balances were drawn from Marinelli Company's Year 2 and Year 1 year-end balance sheets. Account Title Accounts receivable Interest receivable Other operating expenses payable Salaries payable The Year 2 income statement is shown next. Income Statement Sales Salary expense Other operating expenses Operating income Nonoperating items: Interest revenue Net income Year 2 $35,200 4,200 21,000 6,500 a Cash inflows from operating activities b. Cash outflows from operating activities Year 1 $31,600 4,800 18,500 7,200 $530,000 (214,000) (175,000) 141,000 16,500 $157,500 Required a. Use the direct method to compute the amount of cash inflows from operating activities. b. Use the direct method to compute the amount of cash outflows from operating activities.
The following accounts and corresponding balances were drawn from Marinelli Company's Year 2 and Year 1 year-end balance sheets. Account Title Accounts receivable Interest receivable Other operating expenses payable Salaries payable The Year 2 income statement is shown next. Income Statement Sales Salary expense Other operating expenses Operating income Nonoperating items: Interest revenue Net income Year 2 $35,200 4,200 21,000 6,500 a Cash inflows from operating activities b. Cash outflows from operating activities Year 1 $31,600 4,800 18,500 7,200 $530,000 (214,000) (175,000) 141,000 16,500 $157,500 Required a. Use the direct method to compute the amount of cash inflows from operating activities. b. Use the direct method to compute the amount of cash outflows from operating activities.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The following accounts and corresponding balances were drawn from Marinelli Company's Year 2 and Year 1 year-end
balance sheets.
Account Title
Accounts receivable
Interest receivable
Other operating expenses payable
Salaries payable
The Year 2 income statement is shown next.
Income Statement
Sales
Salary expense
Other operating expenses
Operating income
Nonoperating items: Interest revenue
Net income
a.
b.
Year 2
$35,200
4,200
21,000
6,500
Cash inflows from operating activities
Cash outflows from operating activities
Year 1
$31,600
4,800
18,500
7,200
Required
a. Use the direct method to compute the amount of cash inflows from operating activities.
b. Use the direct method to compute the amount of cash outflows from operating activities.
$530,000
(214,000)
(175,000)
141,000
16,500
$157,500
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