Battery builders, Inc. prepared statements of cash flows under both the direct and indirect methods. The operating
Question:
Battery builders, Inc. prepared statements of cash flows under both the direct and indirect methods. The operating sections of each statement under the two methods follows:
DIRECT METHOD
Collection from customers ........... $26,000
Payments to suppliers ............ (13,000)
Payments for operating expenses ....... (10,000)
Cash provided (used) by operating activities .. $ 3,000
INDIRECT METHOD
Net income ............... $ 9,000
Depreciation ................ 3,000
Gain on sale of equipment .......... (2,000)
Increase in inventory ............. (3,000)
Increase in accounts receivable ......... (3,000)
Increase in accounts payable .......... 1,000
Decrease in accrued payables .......... (2,000)
Cash provided (used) by operating activities .... $ 3,000
Required
Prepare an income statement from the information provided.
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Accrual sales Collections from customers Increase in ...View the full answer
