supplement A) Comparing Cash Flow Methods) A) Comparing Cash Flows from Operatin
ID: 2484809 • Letter: S
Question
supplement A) Comparing Cash Flow Methods) A) Comparing Cash Flows from Operating Activities (Direct and Indirect s from a Company's acco O 's accountants have just completed the income statement and balance sheet for the year the following information (dollars in thousands) provided the following INCOME STATEMENT Sales revenue Expenses Cost of goods sold Depreciation expense Salaries expense Rent expense Insurance expense Utilities expense Interest expense on bonds $22,600 $10,500 2,000 4,070 3,200 1,100 850 450 Loss on sale of investments 650 22,820 S (220) Net loss SELECTED BALANCE SHEETACCOUNTS 2015 2016 Merchandise inventory Accounts receivable Accounts payable Salaries payable Rent payable Prepaid rent Prepaid insurance S 65 620 212 23 10 $150 440 285 38 17Explanation / Answer
Statement of cash Flow For the Year ended Dec 31,2016 Ans bIndirect method $ in 000 Cash flows from operating activities Net Income -$220 Adjustments to reconcile net income Net cash provided from operating activities Depreciation 2000 Gain On sale of land Loss on sale of Investment 650 Interest Expense 450 Interest Paid (30000*8%=2400 in thousands = 2.4) -2.4 Decrease in prepaid Rent 1 Decrease in accounts receivables 180 Increase in inventories -85 iNcrease in Prepaid expenses Increse In prepaid Insurance -13 Increase in Accounts Payable 73 Increase In salaries payable 15 Decrease in rent payable -6 Net cash from operating activities 3042.6 Ans a Direct Method Cash flows from operating activities Cash Received from customers 22780 Cash paid to suppliers -10512 Cash paid for opearting expenses -9223 Interest paid -2.4 Net cash from operating activities 3042.6 Working Cash Received from customers 22780 Net Sales+Decrease in Accounts Receivable 22600+180 Cash paid to suppliers 10512 Cost of Good Sold+increase in Inventory-Increase in Accounts Payable 10500+85-73 Cash paid for opearting expenses 9223 Opearting expense-Dep+Increase in prepaid Expenses+Decrease in accured expenses payable-Decrease in prepaid expenses-Increase in accured expenses payable (4070+3200+1100+850)+13+6-1-15
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