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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

Cornerstones of Financial Accounting
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 40E
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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

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?
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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