The direct versus the indirect method to determine cash flows from operating activities The following accounts and

Question:

The direct versus the indirect method to determine cash flows from operating activities The following accounts and corresponding balances were drawn from Bryan Sports, Inc.'s 2012 and 2011 year-end balance sheets:

Account Title 2012 2011 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Un

The 2012 income statement is shown below:

The direct versus the indirect method to determine cash flows

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.

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Fundamental Managerial Accounting Concepts

ISBN: 978-0078110894

6th Edition

Authors: Edmonds, Tsay, olds

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Question Posted: Dec 07, 2011 07:04 AM

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The direct versus the indirect method to determine cash flows from operating activities The following accounts and

Question:

Account Title 2012 2011 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $36,000 65,000 24,000 20,000 4,500 9,500 $45,000 62,000 20,000 25,000 3,900 8,600

Step by Step Answer:

a Direct Method Reconciliation of Accounts Receivable Beginning balance 45000 Increase due to revenue recognized on account 651500 Decrease due to cas...View the full answer

Fundamental Managerial Accounting Concepts

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