The following is the operating section of the statement of cash flows (direct method) of Battery Builders, Inc.: Collections from customers Payments to suppliers for inventory purchases Payments for operating expenses Payments for income taxes Cash provided by operating activities The following information is obtained from the income statement of Battery Builders: Net income Depreciation expense $ 28,000 (13,000) (9,000) (2,260) 3,740 $6,748 4,000 n addition, the following information is obtained from the comparative balance sheets of Battery Builders decreases in parentheses Change in accounts receivable Change in inventory Change In accounts payable Change in accrued payables (related to operating expense) Change in income taxes payable $3,000 3,000 2,000 (2,000) (1,000) Required: 1. Prepare a complete accrual-basis income statement for the current year. 2 Compute the cash flows from operations using the indirect approach (that is start with accrual-basis net income and adjust for various items to obtain cash flows from operations).

Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows fro…

A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the …

Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It…

Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expect…