Question

Arundel Company disclosed the following information for its recent calendar year.
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100,000
Expenses Salaries expense . . . . . . . . . . . . . . 84,000
Utilities expense . . . . . . . . . . . . . . . . . . . . 14,000
Depreciation expense . . . . . . . . . . . . . . . . 14,600
Other expenses . . . . . . . . . . . . . . . . . . . . 3,400
Net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (16,000)
Accounts receivable decrease . . . . . . . . . . . $ 24,000
Purchased a machine . . . . . . . . . . . . . . . . . . . 10,000
Salaries payable increase . . . . . . . . . . . . . . . . 18,000
Other accrued liabilities decrease . . . . . . . . 8,000

Required
1. Prepare the operating activities section of the statement of cash flows using the indirect method.
2. What were the major reasons that this company was able to report a net loss but positive cash flow from operations?
3. Of the potential causes of differences between cash flow from operations and net income, which are the most important to investors?



$1.99
Sales10
Views764
Comments0
  • CreatedNovember 26, 2013
  • Files Included
Post your question
5000