Page 32 13 012 marks) Al Ain Trading LLC has provided the following information
ID: 2591535 • Letter: P
Question
Page 32 13 012 marks) Al Ain Trading LLC has provided the following information and requests you to prepare activities of the statement of eash flows under the indirect method: Net income before taxCS A Depreciation on property plant and equipment AED 275,000 Loss on sale of building AED 125,000 Interest expense AED 50,000 Interest payable at beginning of year AED 75,000 /10 Interest payable at end of year AED 82,000 Income taxes paid AED 100,00 Accounts receivable, beginning of the year AED 625,000 Accounts receivable, end of year AED 400,000 Inventory, beginning of the year AED 300,000 Inventory, end of year AED 375,000 Accounts payable, beginning of the year AED 185,000 Accounts payable, end of year AED 200,000 Required: Please prepare the operating activities section of the statement of cash flows using the indirect method ANSWER:Explanation / Answer
Net Cash Flow from Operating Activities under Indirect Method
Particulars Amount Net Income 450000 Add : Non-Cash Expenses: (Depreciation, Depletion & Amortization Expense) 275000 Add : Non-Operating Losses: (Loss on Sale of Non-Current Assets) 125000 Less : Non-Operating Gains:(Gain on Sale of Non-Current Assets) 0 Add : Decrease in Current Assets: (Accounts Receivable, Prepaid Expenses, Inventory etc.) (625000-400000) 225000 Less : Increase in Current Assets (375000-300000) (75000) Add : Increase in Current Liabilities:(Accounts Payable, Accrued Liabilities, Income Tax Payable etc.) {(82000-75000)+(200000-185000)} 22000 Less : Decrease in Current Liabilities 0 Net Cash Flow from Operating Activities 1022000Related Questions
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