The income statement of Reagan Inc. for the year ended December 31, 2017, report

Question

The income statement of Reagan Inc. for the year ended December 31, 2017, reported the following condensed information:

Roman's balance sheet contained the following comparative data at December 31:

Reagan has no depreciable assets. Accounts payable pertains to operating expenses.

Prepare the operating activities section of the statement of cash flows using the direct method.

Service revenue $700,000 Operating expenses 340,000 Income from operations 360,000 Income tax expense 50,000 Net income $310,000

Explanation / Answer

Net Profit aft Tax                                        310,000

Changes in working Capital:

Add: Increase in income tax payable              2,000

Less:Increase in Accounts receivable               ( 30,000 )

        Decrese in accounts payable             ( 10,000 )

Net cash flow provided from operating activities :   272,000

                    

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