Direct and Indirect Methods Dauve Company reported the following condensed incom
ID: 2472104 • Letter: D
Question
Direct and Indirect Methods
Dauve Company reported the following condensed income statement for 2013:
During 2013, the following changes occurred in the company's current assets and current liabilities:
By visual inspection, prepare the net cash flow from the operating activities section of Dauve's 2013 statement of cash flows using the direct method. Use a minus sign to indicate cash outflows, a decrease in cash or cash payments. I need the following help please
Operating Activities: N/A
Cash Inflows: N/A
Cash recieved from customers $105,500
Cash inflows from operating activities ???
Cash Outflows: N/A
Cash paid to suppliers $(71,500)
Cash paid to employees $(9,200)
Cash paid to income taxes $(6,600)
Cash outflows for operating activites ???
Net cash provided by operating activities $18,200
Please advise to ??? Thanks!
Explanation / Answer
CASH RECEIEVED FROM CUSTOMER
= SALES + DECEREASE IN ACCOUNTS RECEIVABLE
= $100000 + $5500
= $105500
CASH PAID TO SUIPPLIER
FOR CALCULATION OF CASH PAID TO SUPPLIER WE HAVE TO FIRST CALCULATE INVENTORY PURCHASED DURING THE PERIOD
INVENTORY PURCHASED = COST OF GOODS SOLD + INCEREASE IN INVENTORY
= $58000 + $8900
= $66900
CASH PAID TO SUPPLIER
= PURCHASE OF INVENTORY + INCEREASE IN ACCOUNTS PAYBLE
= $66900 + $4600
= $71500
CASH PAID TO EMPLOYEES
= SALARIES EXPENSES - INCEREASE IN SALARIES PAYBLE
= $12000 - $2800
= $9200
CASH PAID TO INCOME TAX
= $6600
DESCRIPTION AMOUNT $ AMOUNT $ OPERATING ACTIVITES CASH INFLOW CASH RECEIVED FROM CUSTOMERS 105000 CASH INFLOW FROM OPERATING ACTIVITIES 105000 CASH OUTFLOW CASH PAID TO SUPPLIER (71500) CASH PAID TO EMPLOYEES (9200) CASH PAID TO INCOME TAX (6600) CASH OUT FLOW FOR OPERATING ACTIVITES (87300) NET CASH PROVIDED BY OPERATING ACTIVITES $18200Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.