The Cash Flows from Operating Activities Are Reported by the Direct

question 32

Essay

The cash flows from operating activities are reported by the direct method on the statement of cash flows. Determine the following:
(a)If sales for the current year were $695,000 and accounts receivable decreased by $43,500 during the year, what was the amount of cash received from customers?
(b)If income tax expense for the current year was $56,000 and income tax payable decreased by $5,200 during the year, what was the amount of cash payments for income tax?

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Definitions:

Ion

An atom or molecule with a net electric charge due to the loss or gain of one or more electrons, essential in a wide array of biological processes.

Acetylcholinesterase

Enzyme found in the synaptic cleft that causes the breakdown of acetylcholine to acetic acid and choline, thus limiting the stimulatory effect of acetylcholine.

Acetylcholine

A neurotransmitter involved in many functions including muscle contraction and the transmission of nerve impulses in the central and peripheral nervous system.

Synapse

The junction between two neurons, where electrical or chemical signals are transmitted from one neuron to another.