Operating Activities Section
Not what you're looking for?
Lafave Inc., a service company, has the following selected information at December 31, 2006 (see attachment).
Balance Sheets 2006 2005
Cash $83,000 $61,000
Accounts receivable 78,000 86,000
Prepaid Expenses 12,000 6,000
Accounts Payable 92,000 87,000
Income Taxes Payable 17,000 13,000
Income statement for 2006
Sales Revenue $173,000
Operating Expenses 160,000
Income before income taxes 13,000
Income tax expense 6,000
Net Income $7,000
Operating Expenses include $4,000 of depreciation expense.
Instructions
(a) Using the direct method, prepare the operating activities section of the statement of
cash flows for 2006.
(b) Using the indirect method, prepare the operating activities section of the statement of
cash flows for 2006.
Purchase this Solution
Solution Summary
The solution explains how to prepare the operating activities section of the statement of cash flows under the indirect and direct methods (see attachment).
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Motivation
This tests some key elements of major motivation theories.
Organizational Leadership Quiz
This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.
Paradigms and Frameworks of Management Research
This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.