E12-8 Reporting Cash Flows from Operating Activities (Indirect Metho The followi

Question

E12-8 Reporting Cash Flows from Operating Activities (Indirect Metho The following information pertains to Guy's Gear Company $80,000 Sales Expenses: Cost of Goods Sold Depreciation Expense Salaries and Wages Expense $50,000 6,000 12.000 68,000 Net Income $12,000 Accounts Receivable decrease Inventory increase Salaries and Wages Payable increase $ 4,000 8,000 750 Required: Present the operating activities section of the statement of cash flows for Guy's Gear Company indirect method. (Amounts to be deducted should be indicated with a minus sign) GUY'S GEAR COMPANY Cash Flow from Operating Activities-Indirect Method Adjustments to Reconcile Net Income to Cash Provided by Operating Activities Changes in Current Assets and Current Liabilities 0

Explanation / Answer

GUY'S GEAR COMPANY: STATEMENT OF CASH FLOWS (INDIRECT METHOD) Cash flows from operating activities: Net income 12000 Adjustments to reconcile net income with cash provided by operating activities: Depreciation expense 6000 Changes in current assets and current liabilities: Decrease in accounts receivable 4000 Increase in inventories -8000 Increase in salaries and wages payable 750 -3250 Net Cash provided by operating activities 14750

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