Suppose your company sells services of $310 in exchange for $200 cash and $110 on account. Depreciation of $130 relating to equipment also is recorded. 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).
Suppose your company sells services of $310 in exchange for $200 cash and $110 on account. Depreciation of $130 relating to equipment also is recorded. 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).
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 39E: Reporting Net Cash Flow from Operating Activities The following information is available for...
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