A comparative balance sheet for “Alpha” Company containing data in € for the last
recent years is as follows:

Required:
1. Prepare the cash flow statement for “Alpha” Company for this year 20X2,
using the indirect method.
2. Prepare the cash flow statement for “Alpha” Company for this year 20X2,
using the direct method. .
3. How can a firm distribute (finance) a positive (negative) cash component of
earnings? Explain briefly (max: 300 words)

 
 

The company reported for the current for year 20X2 the following income statement: Sales Cost of goods Gross margin Selling expenses Income Statement 20X2 Administrative expenses Net operating income Gain on sales of land Gain on sales of marketable securities Dividend Revenue Interest Expense Income before taxes Income taxes Net income 1,135,600 (700,000) 435,600 (125,000) (175,000) 135,600 4,000 8,000 4,150 (53,500) 98,250 (33,850) 64,400