Omega Company’s accountants have just completed the income statement and balance sheet for the year and have provided the following information (dollars in thousands):

Other Data:
The company issued $30,000, 8 percent bonds payable at par during the year.

Required:

1. Prepare the cash flows from operating activities section of the statement of cash flows using the direct method.

2. Prepare the cash flows from operating activities section of the statement of cash flows using the indirect method.

Transcribed Image Text:

INCOME STATEMENT Sales revenue Expenses Cost of goods sold Depreciation expense Salaries expense Rent expense Insurance expense Utilities expense Interest expense on bonds Loss on sale of investments Net loss $10,500 2,000 4,070 Merchandise inventory Accounts receivable Accounts payable Salaries payable Rent payable Prepaid rent Prepaid insurance 3,200 1,100 $150 440 285 38 850 450 650 SELECTED BALANCE SHEET ACCOUNTS Current Year 4 6 17 $ 22,600 22,820 $ (220) Prior Year $65 620 212 23 10 7 4