Assignment: Statement of Cash Flows

Scenario

Below is information from the Biddle Company income statement and current assets and current liabilities from the balance sheet as of December 31, 2017 and 2018.

Biddle Company

INCOME STATEMENT

For year ended dec 31 2018

Sales revenue $142200

Expenses

COst of gods sold. $57000

Depreciation expense $19500

Salerieries Expense. $33000

Rent Expense $10500

Insurance Expense $5300

interest Expense $5100

utlilities Expense $4300

__________

Net income $7500

Biddle Company

Selected Balance Sheet Accounts

At December 31 2018 2017

Account Recievable $7100 $8800

Inventory $3480 $2290

acounts payable $5900 $7600

salaries payable $1180 $850

ulitlites payable $520 $310

prepaid insurance $410 $580

prepaid rent $520 $330

Questions

1.Prepare the cash flows from operating activities section of the company's 2018 statement of cash flows using the direct method.

2.Prepare the cash flows from operating activities section of the company's 2018 statement of cash flows using the indirect method.

3.Compare the two statements of cash flows and comment on the differences.