12. What is the difference between preparing the statement of cash flows using the direct method and using the indirect method?
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What is the difference between preparing the statement of cash flows using the direct method and using the indirect method?
Showing posts with label Direct Method. Show all posts
Showing posts with label Direct Method. Show all posts
Friday, September 11, 2015
Wednesday, July 15, 2015
(Computation of Operating Activities—Direct Method) Presented below are two independent situations
E23-7 (Computation of Operating Activities—Direct Method) Presented below are two independent situations.
Situation A:
Chenowith Co. reports revenues of $200,000 and operating expenses of $110,000 in its first year of operations, 2010. Accounts receivable and accounts payable at year-end were $71,000 and $39,000, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.
Instructions
Using the direct method, compute net cash provided (used) by operating activities.
Situation B:
The income statement for Edgebrook Company shows cost of goods sold $310,000 and operating expenses (exclusive of depreciation) $230,000. The comparative balance sheet for the year shows that inventory increased $21,000, prepaid expenses decreased $8,000, accounts payable (related to merchandise) decreased $17,000, and accrued expenses payable increased $11,000.
Instructions
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.
Click here for the solution: (Computation of Operating Activities—Direct Method) Presented below are two independent situations
Situation A:
Chenowith Co. reports revenues of $200,000 and operating expenses of $110,000 in its first year of operations, 2010. Accounts receivable and accounts payable at year-end were $71,000 and $39,000, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.
Instructions
Using the direct method, compute net cash provided (used) by operating activities.
Situation B:
The income statement for Edgebrook Company shows cost of goods sold $310,000 and operating expenses (exclusive of depreciation) $230,000. The comparative balance sheet for the year shows that inventory increased $21,000, prepaid expenses decreased $8,000, accounts payable (related to merchandise) decreased $17,000, and accrued expenses payable increased $11,000.
Instructions
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.
Click here for the solution: (Computation of Operating Activities—Direct Method) Presented below are two independent situations
Data for Fairchild Company are presented in E23-11
E23-12 (SCF—Direct Method) Data for Fairchild Company are presented in E23-11.
Instructions
Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)
Click here for the solution: Data for Fairchild Company are presented in E23-11
Instructions
Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)
Click here for the solution: Data for Fairchild Company are presented in E23-11
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