
Concept explainers
Operating activities: The items that are directly linked with the transactions that affect the net income of the company are termed as operating activities.
Direct method: It reports cash receipts and disbursements arising out of operating activities. Difference between these amounts helps us arrive at the net
Given Information: Income statement for 2017:
Revenues |
$100,000 |
Expenses |
60,000 |
|
40,000 |
Other information as below:
|
Allowance for doubtful debts |
||||||||
January 1, 2017 Revenues |
20,000 10,000 |
1,000 90,000 |
Write Offs |
|
Write offs |
1,000 |
1,200 1,840 |
January 1, 2017 |
|
December 31, 2017 |
29,000 |
|
|
|
|
2,040 |
December 31, |
(a)
To determine cash flows using direct method from operations.
(b)
(b)
To determine cash flows from operating using the indirect method.

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Chapter 23 Solutions
Study Guide Intermediate Accounting, Volume 1: Chapters 1 - 14
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