Starfire Telescopes Company uses the indirect method to prepare the statement of cash flows.Refer to the following income statement:
Additional information provided by the company includes the following:
Current assets other than cash decreased by $25,000
Current liabilities increased by $3,000
Prepare the operating activities section of the statement of cash flows.
Definitions:
Machine-Hours
A measure of production output or activity based on the number of hours machines are operated in the manufacturing process.
Auditor Hours
The total time spent by auditors reviewing and verifying the financial statements and records of an entity.
Predetermined Overhead Rate
A rate used to allocate manufacturing overhead costs to products, based on a predetermined formula.
Direct Materials
The raw materials that are directly incorporated into a finished product and can be directly attributed to the product.
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