The direct versus the indirect method to determine cash flow from operating activities Top Brands, Inc. (TBI), presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from TBI's 2012 and 2011
The direct versus the indirect method to determine cash flow from operating activities Top Brands, Inc. (TBI), presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from TBI's 2012 and 2011 year-end balance sheets.
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The 2012 income statement is shown below:
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Required
a. Prepare the operating activities section of the statement of cash flows using the direct method.
b. Prepare the operating activities section of the statement of cash flows using the indirect method.
Transcribed Image Text:
Account Title 2011 2012 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $24,000 $26,000 19,000 23,000 4,600 1,000 24,000 20,000 4,200 2,700
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a Direct Method Reconciliation of Accounts Receivable Beginning balance 26 000 Increase due to revenue recognized on account 603 000 Decrease due to c…View the full answer
Related Book For 
Fundamental Managerial Accounting Concepts
ISBN: 978-0078110894
6th Edition
Authors: Edmonds, Tsay, olds
Question Details
Chapter #
14
Section: EXERCISES SERIES A
Problem: 14
Posted Date: December 07, 2011 07:03:47
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