(See attached file for full problem description)
The income statement of Dreamworks International Co. for the year ended December
31, 2002, reported the following condensed information.
Revenue from fees $470,000
Operating expenses 280,000
Income from operations 190,000
Income tax expense 47,000
Net income $143,000
Accounts receivable $55,000 $40,000
Accounts payable 32,000 41,000
Income taxes payable 6,000 4,000
Dreamworks' balance sheet contained the following comparative data at December 31.
Dreamworks has no depreciable assets. (Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cash flows using the direct method.
The solution explains how to prepare a statement of cash flows for Dreamworks International using the direct method