The Following Income Statement and Additional Information for MDB, Inc

question 35

Essay

The following income statement and additional information for MDB, Inc. is relevant to the statement of changes in financial position. $\begin{array} { | l | l | l | l | } \hline & \text { Income Statement } & \text { Additional Information } & \\\hline \text { Sales } & \$ 500,000 & \text { Increase in Acct/Rec } & \$ 10,000 \\\hline \text { Cost of goods sold } & ( 300,000 ) & \text { Increase in Inventory } & \$ 5,000 \\\hline \text { Operating expenses } & ( 140,000 ) & \text { Decrease in Acct/Pay } & \$ 8,000 \\\hline \text { Net income } & 60,000 & \text { Increase in Accrued Oper. Exps } & \$ 6,000 \\\hline\end{array}$ Required:
1. Prepare a schedule showing cash from operations (direct method).
2. Prepare a schedule showing cash from operations (indirect method).

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Definitions:

Investing

The act of allocating resources, typically money, with the expectation of generating an income or profit.