Cash flows from operating activities for both the indirect and direct methods are presented for Electronic Transformations.
Cash Flows from Operating Activities (Indirect method)
Net income ..............................................................$35,000
Adjustments for noncash effects:
Depreciation expense ...................................................8,000
Changes in current assets and current liabilities:
Increase in accounts receivable ......................................(12,000)
Increase in accounts payable ............................................7,000
Increase in income tax payable .........................................5,000
Net cash flows from operating activities ............................................$43,000
Cash Flows from Operating Activities (Direct method)
Cash received from customers .......................................$78,000
Cash paid for operating expenses ...................................(25,000)
Cash paid for income taxes ..........................................(10,000)
Net cash flows from operating activities .............................................$43,000
Required:
Complete the following income statement for Electronic Transformations. Assume all accounts payable are to suppliers.
ELECTRONIC TRANSFORMATIONS
Income Statement
For the year ended December 31, 2012
Revenues .................................................................$ ?
Expenses:
Operating expenses ................................$ ?
Depreciation expense ...........................8,000
Income tax expense ..................................?
Total expenses .......................................................?
Net income ........................................................$35,000