Computing operating activities cash flow----indirect method The accounting recor
ID: 2467426 • Letter: C
Question
Computing operating activities cash flow----indirect method
The accounting records of DVD Sales, Inc. include the following accounts:
Account
Beginning balance
Ending balance
Cash
$5,500
$3,000
Accounts receivable
21,000
17,000
Merchandise inventory
22,000
25,500
Accounts payable
14,500
19,500
Accumulated Depreciation-Equipment
55,000 Jul.1
3,000 Depr.Exp.
58,000 Jul.31
Retained earnings
65,000 Jul.1
65,000 Net Inc.
Dividends 19,000
111,000 Jul 3
Compute DVD’s net cash provided by (used for) operating activities during July 2015. Use the indirect method.
Account
Beginning balance
Ending balance
Cash
$5,500
$3,000
Accounts receivable
21,000
17,000
Merchandise inventory
22,000
25,500
Accounts payable
14,500
19,500
Explanation / Answer
Statement of Cash Flow Particulars Amount Total Amount Net Income 65,000.00 Depreciation Expense 3,000.00 Decrease in AR = 4,000.00 Increase in inventory (3,500.00) Increase in Accounts payable 5,000.00 Cash flow from operating activities 73,500.00
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