The following schedule relates the income statement with cash flows from operating activities, derived by both the direct and indirect methods, in the format illustrated by Graphic 21-10 in the chapter. Some elements necessary to complete the schedule are missing.

Required:

Complete the schedule by determining each of the following missing elements:
1. Cash received from customers
2. Cost of goods sold
3. ? in salaries payable (Increase? or decrease?)
4. Cash paid for depreciation
5. Interest expense
6. Cash paid for insurance
7. Increase in income tax payable
8. Netincome

Transcribed Image Text:

Cash Flows from Operating Activities Income Statement Indirect Method Direct Method Net income Adjustments Sales $300 Decrease in accounts receivable 6 Cash received from customers (24) (Not reported-no cash effect) (12) Gain on sale of equipment 24 Gain on sale of equipment Increase in inventory (7) Increase in accounts payable (174) (33) Cost of goods sold Salaries expense Depreciation expense Bad debt expense Interest expense Insurance expense Loss on sale of land Income tax expense Net Income 18 Cash paid to suppliers (39) ? in salaries payable 6 Cash paid to employees 9 Cash paid for depreciation 3 (Not reported-no cash effect) 3 Cash paid for interest 9 Cash paid for insurance 6 (Not reported-no cash effect) ? Cash paid for income taxes (9) Depreciation expense (3) Bad debt expense (?) Decrease in bond discount (21) Decrease in prepaid insurance (6) Loss on sale of land (27) Increase in income tax payable (21) ? Net cash flows from operating activities S57 Net cash flows from operating activities 57