The two independent cases are listed below: Case A Case B Year 2 Year 1 Year 2 Y

Question

The two independent cases are listed below: Case A Case B Year 2 Year 1 Year 2 Year 1 Sales Revenue $ 10,900 $ 8,500 $ 20,900 $ 17,500 Cost of Goods Sold 5,910 5,100 11,910 10,510 Gross Profit 4,990 3,400 8,990 6,990 Depreciation Expense 1,200 1,200 1,450 1,450 Salaries and Wages Expense 2,400 1,900 4,900 4,900 Net Income 1,390 300 2,640 640 Accounts Receivable 295 390 740 595 Inventory 745 490 725 790 Accounts Payable 790 695 810 900 Salaries and Wages Payable 995 1,190 265 360 Show the operating activities section of the statement of cash flows for year 2 using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

Explanation / Answer

Statement showing Cash flow from operating activities:

S No Particulars Case A(Amount in $) Case B(Amount in $) A Net Income from operation 1,390 2,640 B Add:Non cash Item Depreciation 1,200 1,450 C Changes in working capital Increase/(decrease) in account receivable (95) 145 Increase/(decrease) in Inventory 255 65 Increase/(decrease) in account payable 95 (90) Increase/(decrease) in salaries and wages payable (195) (95) D Cash Flow from operating activities 2,650 3,985

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