Prepare the operating activities section of the statement of cash flows, using t
ID: 2581273 • Letter: P
Question
Prepare the operating activities section of the statement of cash flows, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
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Suppose your company reports $200 of net income and $48 of cash dividends paid, and its comparative balance sheet indicates the following.
1.Prepare the operating activities section of the statement of cash flows, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
Net Income Increase in Accounts Receivable Decrease in Inventory Increase in Salaries and Wages Payable Dividends paid Net Cash Flow from Operating Activities+
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Suppose your company reports $200 of net income and $48 of cash dividends paid, and its comparative balance sheet indicates the following.
Explanation / Answer
Statement of cash flows for the year ended
[ Indirect method ]
Cash flows from operating activities:
Net income $200
Increase accounts receivable ($98)
Decrease inventory $112
Increase in salaries and wages payable $72
Net cash flows from operating activities $286
Cash flows from Investing activities: -
Net cash flows from investing activities $286
Cash flows from financing activities:
Redemption of common stock ($38)
Dividend paid ($48)
Net cash flows from financing activities $200
Beginning cash balance $43
Ending cash balance $243.