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    Determining Cash Flow Using Direct and Indirect Methods

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    Income statement was $200,000. Depreciation was recorded on fixed assets and patents for $20,000 and $7,000. balance of assets and liability at the end and at the beginning of year are as follows:
    end beginning
    cash $50,000 $60,000
    Accounts receivable 112,000 108,000
    Inventories 102,000 80,000
    prepaid expenses 2,500 4,500
    accounts payable 20,000 15,000
    What is amount of cash flows from operating activities reported on the statement of cash flows prepared by the indirect method?

    The numbers are changed but this problem is similar to my exercise problem.

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    Solution Preview

    For your convenience, I have attached a formatted MS Excel spreadsheet containing the information posted below.

    Amount of Cash Flows Prepared by the Indirect Method

    Given: Income from Income Statement: $200,000; Depreciation recorded for fixed assets and patents was $20,000 and $7000 respectively, and the balance of assets and ...

    Solution Summary

    This posting of an formatted MS Excel spreadsheet contains an illustration for the determination of the amount of cash flows prepared by the indirect method.