Description of this paper

Cowan, Inc.:

Description

solution


Question

Presented below is the income statement of Cowan, Inc.;Sales $380,000;Cost of goods sold 225,000;Gross profit $155,000;Operating expenses 85,000;Income before income taxes 70,000;Income taxes 28,000;Net income $ 42,000;In addition, the following information related to net changes in working capital is presented;Debit Credit;Cash $12,000;Trade accounts receivable 15,000;Inventories $19,400;Salaries payable (operating expenses) 8,000;Trade accounts payable 12,000;Income tax payable 3,000;The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.;Instructions;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#79691 | Written in 18-Jul-2015

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