Question: Cash flows from operating activities indirect and direct methods Presented below is

Cash flows from operating activities (indirect and direct methods). Presented below is the income statement of Smiling Tiger, Inc. 
Sales ................ $525,000
Cost of goods sold ......... $260,000
Gross profit .............. $265,000
Operating expenses ........... $106,000
Income before income taxes ...... $159,000
Income taxes ............ $ 63,600
Net income ............ $ 95,400
In addition, the following information related to net changes in working capital is presented.


Depreciation expense for the year was $23,000
Deferred tax liability account increased $3,400

Required:
Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows:
(a) Using the indirect method.
(b) Using the directmethod.
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  • CreatedAugust 26, 2013
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