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 $ 10,400 $ 6,000 $ 20,400 $ 15,000 Cost of Goods Sold 5,460 3,100 11,460 8,770 Gross Profit 4,940 2,900 8,940 6,230 Depreciation Expense 1,100 1,100 1,200 1,200 Salaries and Wages Expense 1,900 1,400 4,400 4,400 Net Income 1,940 400 3,340 630 Accounts Receivable 270 340 690 570 Inventory 720 440 700 740 Accounts Payable 740 670 860 910 Salaries and Wages Payable 970 1,140 340 410 Show the operating activities section of the statement of cash flows for year 2 using the indirect method

Explanation / Answer

Answer:-

Statement of Cash Flow (Using Indirect Method) For the year ended   Particulars Amount Amount $ $ Cash flow from opreating activities Case A Case B Net Income 1940 3340 Adjustments to reconcile net income to net cash provided by opreating activities Adjustment for non cash effects Depreciation 1100 1200 Change in opreating assets & liabilities Decrease/Increase in accounts receivable 70 -120 Decrease/Increase in inventory -280 40 Increase/Decrease in accounts payable 70 -50 Increase/Decrease in salaries & wages payable -170 -70 Net cash flow from opreating activities (a) 2730 4340

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