Exercise 12-5A (Algo) Use the direct method to determine cash flows from operating activities LO 12-2 The following accounts and corresponding balances were drawn from Marinelli Company's Year 2 and Year 1 year-end balance sheets. Year 2 $47,000 4,650 30,100 10,050 Account Title Accounts receivable Interest receivable Other operating expenses payable Salaries payable The Year 2 income statement is shown next. Sales Salary expense Other operating expenses a b. Income Statement Operating income Nonoperating items: Interest revenue Net income Year 1 $41,000 6,850 18,000 15,150 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. Cash inflows from operating activities Cash outflows from operating activities $745,000 (158,500) (252,500) 334,000 25,900 $359,900

Exercise 12-5A (Algo) Use the direct method to determine cash flows from operating activities LO 122 The following accounts and corresponding balances were drawn from Marinelii Company's Year 2 and Year 1 year-end balance sheets The Year 2 income statement is shown next 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 outllows from operating activities