Please show all work. This is a 2 part problem (using the direct method ((E23-5B

Question

Please show all work. This is a 2 part problem (using the direct method ((E23-5B)) and indirect method ((E23-6B))). Please help with both parts to the problem!

E23-5B (L02,3) (Preparation of Operating Activities Section-Direct Method) Krayon Company's income statement for the year ended December 31, 2017, contained the following condensed information. $1,604,000 Revenue from fees Operating expenses (excluding depreciation) Depreciation expense Gain on sale of equipment Income before income taxes Income tax expense Net income $1,280,000 111,000 1,384,000 220,000 90,000 $130,000 Krayon's balance sheet contained the following comparative data at December 31. 2017 2016 Accounts receivable Accounts payable Income taxes payable $169,000 132,000 16,500 $119,000 82,000 25,000 (Accounts payable pertains to operating expenses.) Instructions Prepare the operating activities section of the statement of cash flows using the direct method. E23-6B (L02,3) (Preparation of Operating Activities Section-Indirect Method) Data for Krayon Company are presented in E23-5B. Instructions Prepare the operating activities section of the statement of cash flows using the indirect method.

Explanation / Answer

Prepare operating activities section under statement of cash flow using direct method :

Prepare operating activities section under statement of cash flow using indirect method :

Cash received from customer 1554000 cash payment to supplier (1230000) Cash paid for income tax (98500) Net cash flow from operating activities 225500

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