Cash Flows from Operating Activities-Indirect Method

question 100

Essay

Cash flows from operating activities-indirect method
The data below are taken from the financial statements of the Spectrum Corporation:
Complete the partial statement of cash flows for the year ended December 31,2018,showing the computation of net cash flows from operating activities by the indirect method:

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Definitions:

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on activity levels such as labor hours or machine hours.

Actual Level Of Activity

The real measure of how much work is performed or output is produced in a given period, often compared to planned or standard levels of activity.

Standard Activity

A benchmark or base level of activity used for planning, measuring, and controlling performance.

Quantity Standard

A preset benchmark that specifies the expected amount or number of units to be used or produced under normal conditions.