Portions of the financial statements for Alliance Technologies are provided belo

Question

Portions of the financial statements for Alliance Technologies are provided below ALLIANCE TECHNOLOGIES Income Statement For the year ended December 31, 2018 $ 405,000 Net sales Expenses Cost of goods sold Operating expenses Depreciation expense Income tax expense $235,000 70,000 17,000 27,000 Total expenses 349,000 Net income $56,000 ALLIANCE TECHNOLOGIES Selected Balance Sheet Data December 31, 2018, compared to December 31, 2017 Decrease in accounts receivable Increase in inventory Decrease in prepaid rent Increase in salaries payable Decrease in accounts payable Increase in income tax payable S 7,000 14,000 10,000 6,000 9,000 24,000 Required Prepare the operating activities section of the statement of cash flows for Alliance Technologies using the direct method. (List cash outflows as negative amounts.) ALLIANCE TECHNOLOGIES Statement of Cash Flows (partial) For the Year Ended December 31, 2018 Cash Flows from Operating Activities Net cash flows from operating activities

Explanation / Answer

Answer :

Alliance Technologies

Statement of cash flowhen (Partial)

For the year ended December 31, 2018

Cash flows from Operating Activities Cash receipts from customers (405000+7000) 412000 Cash payments to suppliers (235000+14000-9000) (240000) Cash payments to employees (6000) (6000) Cash payments for purchase of prepaid assets (10000) (10000) Cash generated from operations 156000 Income tax paid (24000+27000) (51000) Interest paid Nil Net cash flows from Operating Activities 105000

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