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Statement of Cash Flow using Indirect method and Direct method.

Executive Inc. had the following operating balances for 2015:
December 31, 2015 January 1, 2015
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $54,400 $62,800
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,300 29,900
Accounts Receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,600 77,200
All purchases of inventory were on account.
Executive provides the following income statement information for 2015:
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 740,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . (360,000)
Other expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . ........ . . . . (104,000)
Depreciation expense . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . (87,000)
Loss on sale of equipment . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . (9,000)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 180,000
Compute cash from operations.

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Solution Summary

The solution provides statement of cash flow using direct and indirect method separately and answers from both methods are verified.Detail working for finding out net cash received from customers and cash paid to suppliers are provided separately so as to enable students to understand how final figures are extracted in main solution while using direct method.Amounts to be deducted are indicated by minus signs.

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