Cash flows from used for operating activitiesindirect method
The net income reported on the income statement for the current year was $ Depreciation recorded on equipment and a building
amounted to $ for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as
follows:
a Prepare the "Cash flows from used for operating activities" section of the statement of cash flows, using the indirect method. Use the
minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Statement of Cash Flows partial
Line Item Description
Cash flows from used for operating activities:
Adjustments to reconcile net income to net cash flows from used for operating activities:
Changes in current operating assets and liabilities:
Decrease in accounts receivable
Increase in inventories
Decrease in prepaid expenses
Decrease in accounts payable
Increase in salaries payable
Net cash flows from operating activities
b If the direct method had been used, would the net cash flows from operating activities have been the same?
