The net income reported on the income statement for the current year was $312,900. Depreciation recorded on equipment and a building amounted to $93,600 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $81,040 $85,090 Accounts receivable (net) 102,760 105,000 Inventories 202,600 180,900 Prepaid expenses 11,260 12,000 Accounts payable (merchandise creditors) 90,520 94,960 Salaries payable 13,050 11,830 Question Content Area A. Prepare the "Cash Flows from Operating Activities" section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. B. If the direct method had been used, would the net cash flow from operating activities have been the same? yes or no
The net income reported on the income statement for the current year was $312,900. Depreciation recorded on equipment and a building amounted to $93,600 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: End of Year Beginning of Year Cash $81,040 $85,090 Accounts receivable (net) 102,760 105,000 Inventories 202,600 180,900 Prepaid expenses 11,260 12,000 Accounts payable (merchandise creditors) 90,520 94,960 Salaries payable 13,050 11,830 Question Content Area A. Prepare the "Cash Flows from Operating Activities" section of the statement of cash flows, using the indirect method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. B. If the direct method had been used, would the net cash flow from operating activities have been the same? yes or no
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The net income reported on the income statement for the current year was $312,900.
| End of Year | Beginning of Year | |||
| Cash | $81,040 | $85,090 | ||
| 102,760 | 105,000 | |||
| Inventories | 202,600 | 180,900 | ||
| Prepaid expenses | 11,260 | 12,000 | ||
| Accounts payable (merchandise creditors) | 90,520 | 94,960 | ||
| Salaries payable | 13,050 | 11,830 |
Question Content Area
A. Prepare the "
B. If the direct method had been used, would the net cash flow from operating activities have been the same? yes or no
Transcribed Image Text:Statement of Cash Flows (partial)
Cash flows from operating activities:
Net income
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation
Changes in current operating assets and liabilities:
Decrease in accounts receivable
Increase in inventories
Decrease in prepaid expenses
Decrease in accounts payable
Decrease in salaries payable
Net cash flow from operating activities
b. If the direct method had been used, would the net cash flow from operating activities have been the same?
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