Indirect Method
Refer to Practice 5 9. Prepare the operating cash flow section of the statement of cash flows using the indirect method.
Practice 5 9
Direct Method
Using the following income statement and cash flow adjustment information, prepare the operating cash flow section of the statement of cash flows using the direct method.
|
Sales |
$4,000 |
|
Cost of goods sold |
1,700 |
|
Interest expense |
350 |
|
Depreciation expense |
800 |
|
Net income |
$1,150 |
Adjustments:
(a) Interest payable decreased by $60.
(b) Accounts receivable decreased by $290.
(c) Inventory increased by $500.
(d) Accounts payable decreased by $130.