Question: Use the following income statement and information about changes in

Use the following income statement and information about changes in non-cash current assets and current liabilities to present the cash flows from operating activities using the direct method:


Changes in current asset and current liability accounts during the year were as follows:
Accounts receivable .................................. $10,800 increase
Merchandise inventory .............................. 7,200 increases
Accounts payable...................................... 3,600 decrease
Salaries payable......................................... 1,200 decrease

Analysis Component: Use the information above to present the cash flows from operating activities using the indirect method. Explain the differences and similarities between the direct and indirectmethods.


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  • CreatedJanuary 08, 2015
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