(Preparation of Operating Activities Section-Direct Method) Norman Company\'s in
ID: 2349960 • Letter: #
Question
(Preparation of Operating Activities Section-Direct Method)Norman Company's income statement for the year ended December 31, 2010, contained the following condensed information.
Revenue from fees $840,000
Operating expenses (excl. depreciation) $624,000
Depreciation expense 60,000
Loss on sale of equipment 26,000 710,000
Income before taxes 130,000
Income tax expense 40,000
Net income $90,000
Norman's balance sheet contained the following comparative data at December 31.
2010 2009
Accounts receivable $37,000 $59,000
Accounts payable 46,000 31,000
Income taxes payable 4,000 8,500
(Accounts payable pertains to operating expenses.)
Instructions
Complete the operating activities section of the statement of cash flows using the direct method. (Enter all amounts as positive and subtract where necessary. List amounts from largest to smallest eg 10, 5, 3, 2.)
NORMAN COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2010
Cash flows from operating activities
1. $
2. $
3.
4.
Net cash used or provided by operating activities $
Explanation / Answer
NORMAN COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2010.
NORMAN COMPANY
Partial Statement of Cash Flows
For the Year Ended December 31, 2010.
Cash Flow From Operating Activities: Income before Tax $90,000 Add: Depreciation 60000 Loss on sale of equipment 26000 Decrease in Accounts Receivables 22000 Increase in Accounts paybles 15000 Increase in operating activities: 123000 213000 Less: Decrease in tax payble 4500 Net Cash Flow from Operating Activities: $208,500Related Questions
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