Suppose your company sells services of $260 in exchange for $175 cash and $85 on account. Depreciation of $105 relating to equipment also is recorded.   How would i do the following questions? Calculate the amount that should be reported as net cash flow from operating activities. Calculate the amount that should be reported as net income. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).

Question

Suppose your company sells services of $260 in exchange for $175 cash and $85 on account. Depreciation of $105 relating to equipment also is recorded.

 

How would i do the following questions?

  1. Calculate the amount that should be reported as net cash flow from operating activities.
  2. Calculate the amount that should be reported as net income.
  3. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).

 

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