Parker Corporation computed the amount of cash flows from operations using both the direct and indirect methods,

Question:

Parker Corporation computed the amount of cash flows from operations using both the direct and indirect methods, as follows:

Direct method:

Collections from customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 525,000

Payments to suppliers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (170,000)

Payments for operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (198,000)

Cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 157,000

Indirect method:

Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 95,000

Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62,100

Gain on sale of equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,000)

Decrease in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400

Decrease in accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,600

Decrease in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,800)

Increase in miscellaneous accrued payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,700

Cash flows provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 157,000

Required:

Using the data provided, prepare an income statement for Parker for the year 2012.

Accounts Payable
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... Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...