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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 $27,500 51,000 27,100 18,400 4,200 2,950 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $23,000 57,400 15,500 26,100 4,950 800 The Year 2 income statement is shown below: Income Statement $616,000 (374,000) 242,000 4,400 (40,000) (142,000) (5,800) 58,600 4,900 Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of 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 B Required A Prepare the operating activities section of the statement of cash flows using the direct method. (Cash outflows should be indicated with minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash collections from customers for sales Cash collections from customers for services Cash payments for: 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 $27,500 51,000 27,100 18,400 4,200 2,950 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $23,000 57,400 15,500 26,100 4,950 800 The Year 2 income statement is shown below: Income Statement $616,000 (374,000) 242,000 4,400 (40,000) (142,000) (5,800) 58,600 4,900 Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of 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 B Required A Prepare the operating activities section of the statement of cash flows using the direct method. (Cash outflows should be indicated with minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash collections from customers for sales Cash collections from customers for services Cash payments for: 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 1PA
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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 $27,500 51,000 27,100 18,400 4,200 2,950 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $23,000 57,400 15,500 26,100 4,950 800 The Year 2 income statement is shown below: Income Statement $616,000 (374,000) 242,000 4,400 (40,000) (142,000) (5,800) 58,600 4,900 Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of 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 B Required A Prepare the operating activities section of the statement of cash flows using the direct method. (Cash outflows should be indicated with minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash collections from customers for sales Cash collections from customers for services Cash payments for: Net cash flow from operating activities <Required A Required B
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 $27,500 51,000 27,100 18,400 4,200 2,950 Accounts receivable Merchandise inventory Prepaid insurance Accounts payable Salaries payable Unearned service revenue $23,000 57,400 15,500 26,100 4,950 800 The Year 2 income statement is shown below: Income Statement $616,000 (374,000) 242,000 4,400 (40,000) (142,000) (5,800) 58,600 4,900 Sales Cost of goods sold Gross margin Service revenue Insurance expense Salaries expense Depreciation expense Operating income Gain on sale of 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 B Required A Prepare the operating activities section of the statement of cash flows using the direct method. (Cash outflows should be indicated with minus sign.) STUART BRANDS, INC. Statement of Cash Flows (Operating Activities) For the Year Ended December 31, Year 2 Cash flows from operating activities: Cash collections from customers for sales Cash collections from customers for services Cash payments for: Net cash flow from operating activities <Required A Required B
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