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Ex 7- 46
Receivables and the Statement of Cash Flows
The following selected information is provided for Lynez Company. All sales are credit sales and all receivables are trade receivables.
Accounts receivable, January 1 net balance125,000
Accounts receivable, December 31, net balance 165,000
Sales for the year800,000
Uncollectable accounts written off during the year.. 14,000
Bad Debt expense for the year 24,000
Cash expenses for the year681,000
Net Income for the year 95,000
Using the format illustrated in the chapter and the preceding information, answer the following questions:
1, Using the direct method, what is the net cash flow from operations that Lynez Company would report in its statement of cash flows?
2, Assuming the use of the indirect method what adjustments to net income would be required in reporting net cash flow from operations?
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