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Stuart Brands, Inc., presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Stuart's Year 2 and Year 1 year-end balance sheets: Account Title Year 2 Year 1 Accounts $23,000 $27,500 receivable Merchandise 57,400 51,000 inventory Prepaid insurance 15,500 27,100 Accounts payable 26,100 Salaries payable Unearned service 18,400 4,200 4,950 2,950 800 revenue The Year 2 income statement is shown below: Income Statement Sales $616,000 Cost of goods sold (374,000) Gross margin Service revenue 242,000 4,400 (40,000) (142,000) Insurance expense Salaries expense Depreciation (5,800) expense Operating income Gain on sale of 58,600 4,900 equipment 63,500 Net income 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. Complete this question by entering your answers in the tabs below. Required Required A В Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct Add: noncash expenses Net cash flow from operating activities

Stuart Brands, Inc., presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Stuart's Year 2 and Year 1 year-end balance sheets: Account Title Year 2 Year 1 Accounts $23,000 $27,500 receivable Merchandise 57,400 51,000 inventory Prepaid insurance 15,500 27,100 Accounts payable 26,100 Salaries payable Unearned service 18,400 4,200 4,950 2,950 800 revenue The Year 2 income statement is shown below: Income Statement Sales $616,000 Cost of goods sold (374,000) Gross margin Service revenue 242,000 4,400 (40,000) (142,000) Insurance expense Salaries expense Depreciation (5,800) expense Operating income Gain on sale of 58,600 4,900 equipment 63,500 Net income 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. Complete this question by entering your answers in the tabs below. Required Required A В Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct Add: noncash expenses Net cash flow from operating activities

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 15E
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Stuart Brands, Inc., presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Stuart's Year 2 and Year 1 year-end balance sheets: Account Title Year 2 Year 1 Accounts $23,000 $27,500 receivable Merchandise 57,400 51,000 inventory Prepaid insurance 15,500 27,100 Accounts payable 26,100 Salaries payable Unearned service 18,400 4,200 4,950 2,950 800 revenue The Year 2 income statement is shown below: Income Statement Sales $616,000 Cost of goods sold (374,000) Gross margin Service revenue 242,000 4,400 (40,000) (142,000) Insurance expense Salaries expense Depreciation (5,800) expense Operating income Gain on sale of 58,600 4,900 equipment 63,500 Net income 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. Complete this question by entering your answers in the tabs below. Required Required A В Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct Add: noncash expenses Net cash flow from operating activities
Transcribed Image Text:Stuart Brands, Inc., presents its statement of cash flows using the indirect method. The following accounts and corresponding balances were drawn from Stuart's Year 2 and Year 1 year-end balance sheets: Account Title Year 2 Year 1 Accounts $23,000 $27,500 receivable Merchandise 57,400 51,000 inventory Prepaid insurance 15,500 27,100 Accounts payable 26,100 Salaries payable Unearned service 18,400 4,200 4,950 2,950 800 revenue The Year 2 income statement is shown below: Income Statement Sales $616,000 Cost of goods sold (374,000) Gross margin Service revenue 242,000 4,400 (40,000) (142,000) Insurance expense Salaries expense Depreciation (5,800) expense Operating income Gain on sale of 58,600 4,900 equipment 63,500 Net income 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. Complete this question by entering your answers in the tabs below. Required Required A В Prepare the operating activities section of the statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Add: Deduct Add: noncash expenses Net cash flow from operating activities
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