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6. (TCO F) Cash flows from operating activities (i...




6. (TCO F) Cash flows from operating activities (indirect and direct methods). Presented below is the income statement of Smiling Tiger, Inc. Sales $525,000 Cost of goods sold 260,000 Gross profit $265,000 Operating expenses 106,000 Income before income taxes 159,000 Income taxes 63,600 Net income $95,400 In addition, the following information related to net changes in working capital is presented. Debit Credit Cash $10,000 Accounts receivable 15,000 Inventories $36,000 Salaries payable (operating expenses) 15,000 Accounts payable 23,000 Income taxes payable 5,000 Depreciation expense for the year was $23,000 Deferred tax liability account increased $3,400 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#9117 | Written in 18-Jul-2015

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