Cash Flows from Operating Activities (Indirect and Direct Methods) In Addition, the Following Information Related to Net Changes in Is

question 125

Essay

Cash flows from operating activities (indirect and direct methods).Presented below is the income statement of Cowan, Inc.: $$\begin{array} { l r } \text { Sales revenue } & \$ 380,000 \\\text { Cost of goods sold } & 225,000 \\\text { Gross profit } & \$ 155,000 \\\text { Operating expenses } & 85,000 \\\text { Income before income taxes } & 70,000 \\\text { Income taxes } & 28,000 \\\text { Net income } & \$ 42,000\end{array}$$ In addition, the following information related to net changes in working capital is presented: The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.
InstructionsPrepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows:
(a) using the indirect method.
(b) using the direct method.

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Definitions:

Age Groups

Categorizations of populations based on age, often used in research, marketing, and policy development to address specific needs or characteristics.

Polyydrug Use

The concurrent use of multiple drugs or substances, often to enhance the effect of a primary drug or to counteract its negative side effects.

Hispanic Americans

Refers to individuals in the United States who are descendants of people from countries of Latin America and Spain.

African American

Denotes Americans of African descent, particularly those whose ancestors were enslaved and transported to the United States.