gvite undirect Method) [LO 12-2 The two independent cases are listed below: Case

Question

gvite undirect Method) [LO 12-2 The two independent cases are listed below: Case A Case B Sales Revenue Cost of Goods Sold Gross Profit Depreciation Expense Year 2 Year 1 Year 2 Year 1 $11,600 $ 12,000 $ 21,600 $21,000 6,540 8,700 12,540 12,940 5,060 3,300 9,060 8,060 1,000 1,000 1,800 1,800 Salaries and Wages Expense 1,900 1,400 5,600 5 Net Income Accounts Receivable 160 460 760 940 330 460 810 630 860 560 810 660 560 760 860 Salaries and Wages Payable 1,030 260 230 310 900 1 780 Accounts Payable 730 Show the operating activities section of the statement of cash flows for year 2 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) Case A Case B Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities Changes in Assets and Liabilities

Explanation / Answer

Solution:

Statement of cash flow from operating activites Particulars Case A Case B Net Income $2,160.00 $1,660.00 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation $1,000.00 $1,800.00 Changes in Assets and Liabilities: Change in Accounts receivables $130.00 -$180.00 Change in Inventory -$220.00 $100.00 Change in Accounts Payable $130.00 -$80.00 Change in Salaries and wages payable -$230.00 -$80.00 Net cash provided by operating activites $2,970.00 $3,220.00

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