Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic.
Question:
Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts are in thousands (000s).
Cash Flows from Operating Activities (Indirect method)
Net income ........................................................................................$164
Adjustments for noncash effects:
Depreciation expense ................................................................................52
Changes in current assets and current liabilities:
Increase in accounts receivable ....................................................................(28)
Decrease in inventory ................................................................................40
Increase in prepaid rent ..............................................................................(4)
Decrease in accounts payable .....................................................................(16)
Decrease in income tax payable .....................................................................(8)
Net cash flows from operating activities .........................................................$200
Cash Flows from Operating Activities (Direct method)
Cash received from customers .................................................................$ 4,020
Cash paid to suppliers ...........................................................................(2,580)
Cash paid for operating expenses ..............................................................(1,152)
Cash paid for income taxes ........................................................................(88)
Net cash flows from operating activities .........................................................$200
Required:
Complete the following income statement for Reverse Logic. Assume all accounts payable are to suppliers.
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Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
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REVERSE LOGIC Cash Flows from Operating Activities Net income 164 Adjustments for noncash effects De...View the full answer
Financial Accounting
ISBN: 9780078110825
2nd Edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
