Loveless Corporation had the following 2022 income statement.

Revenues ............. $100,000
Expenses .................. 60,000
 ............................... $ 40,000

In 2022, Loveless had the following activity in selected accounts.

Prepare Loveless’s cash flows from operating activities section of the statement of cash flows using 

(a) The direct method 

(b) The indirect method.

Transcribed Image Text:

Accounts Receivable 1/1/22 20,000 Revenues 100,0oo0 1,000 Write-offs 90,000 Collections 12/31/22 29,000 Allowance for Doubtful Accounts | 1,200 1/1/22 Write-offs 1,000 1,840 Bad debt expense 2,040 12/31/22