Oregon Company disclosed the following information for its recent calendar year.
|
Revenues |
$100,000 |
|
Expenses |
|
|
Salaries expense |
68,000 |
|
Utilities expense |
28,000 |
|
Depreciation expense |
29,200 |
|
Other expenses |
6,800 |
|
Net loss |
$ (32,000) |
|
Accounts receivable decrease |
$ 28,000 |
|
Purchased a machine |
20,000 |
|
Salaries payable increase |
26,000 |
|
Other accrued liabilities decrease |
16,000 |
Required
1. Prepare the operating activities section of the statement of cash flows using the indirect method.
2. What were the major reasons that this company was able to report a net loss but positive cash flow from operations?
3. Of the potential causes of differences between cash flow from operations and net income, which are the most important to investors?