The income statement for Granville Manufacturing Company is presented below. The following balance sheet changes occurred during

Question:

The income statement for Granville Manufacturing Company is presented below.

The following balance sheet changes occurred during the year:
€¢ Accounts receivable increased by $182,400.
€¢ Inventory increased by $98,725.
€¢ Prepaid expenses decreased by $64,100.
€¢ Accounts payable increased by $43,850.
€¢ Salaries payable increased by $54,900.

Required:
1. Prepare the net cash flows from operating activities using the indirect method.
2. What are the causes of the major differences between net income and net cash flow from operating activities?

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... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...