Molloy Ltd. reported the following for the fiscal year 2021: Additional information: 1. Accounts receivable decreased by

Question:

Molloy Ltd. reported the following for the fiscal year 2021:

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Additional information:

1. Accounts receivable decreased by $15,000 during the year.

2. Inventory increased by $7,000 during the year.

3. Prepaid expenses decreased by $5,000 during the year.

4. Accounts payable to suppliers increased by $10,000 during the year.

5. Accrued expenses payable increased by $4,000 during the year.

6. Income tax payable decreased by $6,000 during the year.

Instructions

Prepare the operating activities section of the cash fl ow statement using either

(a) The indirect method or

(b) the direct method, as assigned by your instructor.

Taking It Further

In what circumstances will the direct method result in a different amount of cash provided (used) by operations than the indirect method?

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...
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Related Book For  book-img-for-question

Accounting Principles Volume 2

ISBN: 978-1119502555

8th Canadian Edition

Authors: Jerry J. Weygandt, Donald E. Kieso, Paul D. Kimmel, Barbara Trenholm, Valerie Warren, Lori Novak

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