The following accounts and corresponding balances were drawn from Pixi Companys Year 2 and Year 1 year-end

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The following accounts and corresponding balances were drawn from Pixi Company’s Year 2 and Year 1 year-end balance sheets:

Year 2 Year 1 Account Title Accounts receivable Interest receivable Other operating expenses payable Salaries payable $6


The Year 2 income statement is shown next: Income Statement
Sales ......................................................................................$650,000
Salary expense .....................................................................(420,000)
Other operating expenses ....................................................(110,000).
Operating income .................................................................120,000
Non operating items: Interest revenue ..................................15,000
Net income ..........................................................................$135,000


Required
a. Use the direct method to compute the amount of cash inflows from operating activities.
b. Use the direct method to compute the amount of cash outflows from operating activities.

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Introductory Financial Accounting for Business

ISBN: 978-1260299441

1st edition

Authors: Thomas Edmonds, Christopher Edmonds

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