ACCT2110 Week 11 Statement of Cashflows Additional Exercise 1. Presented below is the income statement of...

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ACCT2110 Week 11 Statement of Cashflows Additional Exercise 1. Presented below is the income statement of Coming Company: Sales Cost of goods sold Gross profit Operating expenses Income before income taxes $305,000 180,000 $125,000 68,000 57,000 21,400 $35,600 Income taxes Net income In addition, the following information related to net changes in working capital is presented: Cash Accounts receivable Inventories Salaries payable (operating expenses) Accounts payable Income tax payable Debit $9,600 10,000 $15,620 6,400 9,500 2,400 The company also indicates that depreciation expense for the year was $12,360 and that the deferred tax liability account increased $3,080. Required: (a) Compute the net cash flow from operating activities that would be shown on a statement of cash flows using the indirect method. B4 PRI (b) Compute the net cash flow from operating activities that would be shown on a statement of cash flows using the direct method. P47 PPT (c) State the major difference between the two methods in handling statement of cash flows. 1 Credit ACCT2110 Week 11 Statement of Cashflows Additional Exercise 1. Presented below is the income statement of Coming Company: Sales Cost of goods sold Gross profit Operating expenses Income before income taxes $305,000 180,000 $125,000 68,000 57,000 21,400 $35,600 Income taxes Net income In addition, the following information related to net changes in working capital is presented: Cash Accounts receivable Inventories Salaries payable (operating expenses) Accounts payable Income tax payable Debit $9,600 10,000 $15,620 6,400 9,500 2,400 The company also indicates that depreciation expense for the year was $12,360 and that the deferred tax liability account increased $3,080. Required: (a) Compute the net cash flow from operating activities that would be shown on a statement of cash flows using the indirect method. B4 PRI (b) Compute the net cash flow from operating activities that would be shown on a statement of cash flows using the direct method. P47 PPT (c) State the major difference between the two methods in handling statement of cash flows. 1 Credit