Cash flows from operating activities for both the indirect and direct methods ar

Question

Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts are in thousands (000s) Cash Flows from Operating Activities (Indirect method) Net income S 158 Adjustments to reconcile net income to net cash flows from operating activities Depreciation expense Increase in accounts receivable Decrease in inventory Increase in prepaid rent Decrease in accounts payable Decrease in income tax payable 46 (22) 34 (15) Net cash flows from operating activities $188 Cash Flows from Operating Activities (Direct method) Cash received from customers Cash paid to suppliers Cash paid for operating expenses Cash paid for income taxes S 3,990 (2,573) (1,147) (82) Net cash flows from operating activities $188

Explanation / Answer

Reverse Logic Income Statement For the year ended Dec. 31 2018 Net Sales ($3990 +$22) $4,012.00 Less: Expenses Cost Of Good sold $2,592.00 Operating Expenses ($1147 - $5 (Increase in Prepaid rent) $1,142.00 Depreciation Expenses $46.00 Income Tax Expenses ($82 - $8) $74.00 Total Expenses $3,854.00 Net Income $158.00 Cash paid to suppliers $2,573.00 Decrease in accounts payable -$15.00 Decrease in inventory $34.00 Cost of Good Sold $2,592.00

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