Pa 23. Evita Corporation prepares its statement of cash flows using the indirect
ID: 2594823 • Letter: P
Question
Pa 23. Evita Corporation prepares its statement of cash flows using the indirect method. Evita's statement showed "Net cash provided by (used in) operating activities" of $46,000. Under the direct method, this number would have been: A) SO B) $46,000 C) greater than $46,000. D) less than $46,000 but greater than SO. 24) Last year Lawn Corporation reported sales of $115,000 on its income statement. During the year, accounts receivable decreased by $10,000 and accounts payable increased by $15,000. The company uses the direct method to determine the net cash provided by (used in) operating activities on the statement of cash flows. The sales revenue adjusted to a cash basis for the year would be: A) $125,000 B) $90,000 C) $140,000 D) $100,000 25) Sales reported on the income statement totaled $750,000. The beginning balance in accounts receivable was $70,000. The ending balance in accounts receivable was $80,000. Under the direct method of determining the net cash provided by (used in) operating activities on the statement of cash flows, sales adjusted to a cash basis are: A) $760,000 B) $740.000Explanation / Answer
23. The option B) $46,000 is correct.
Explanation:
Both the direct and indirec method of cash flow will give the same result of Net cash provided by (used in) operatng activities.
24. The option A) $125,000 ia correct option.
Explanation:
Cash Receipt from customers = $115,000 + $10,000 = $125,000 (as accounts receivable decreased by $10,000)
The saeles revenue adjusted to thec cash basis is $125,000
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