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Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows:

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1. Glitter Girl, Inc. recognized net income of $150,000 including $26,000 in depreciation expense.;Additional changes from the balance sheet are as follows.;Accounts Receivable $3,500 decrease;Prepaid Expenses $15,000 decrease;Inventory $35,500 increase;Accrued Liabilities $12,000 decrease;Accounts Payable $20,000 increase;Compute the net cash from operating activities based on the above information.;$132,500;$79,000;$205,500;$167,000;2. Cash flows from operating activities (indirect and direct methods).;Presented below is the income statement of Smiling Tiger, Inc.;Sales;$250,000;Cost of goods sold;109,000;Gross profit;$141,000;Operating expenses;85,000;Income before income taxes;56,000;Income taxes;22,400;Net income;$33,600;In addition, the following information related to net changes in working capital is presented.;Debit;Credit;Cash;$10,600;Accounts receivable;2,400;Inventories;$3,600;Salaries payable (operating expenses);12,000;Accounts payable;15,000;Income taxes payable;1,400;Depreciation expense for the year was $14,700;Deferred tax liability account increased $1,800;Required;Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows;(a);using the indirect method.;(b);using the direct method.

 

Paper#23978 | Written in 18-Jul-2015

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