Calculate cash from operating activities using the indirect method (FOR PUTUL ONLY)

The following information is from the comparative balance sheets of Discovery Tech Corporation at June 30, 2011 AND 2010

(IN THOUSANDS)                                   AT June 30                                  2011                        2010

Current Assets:   

Cash                                                                                                                $2,750                    $2,115

Accounts Receivable                                                                                       3,000                      2,750

Inventory                                                                                                            1,700                      1,025

Prepaid Insurance                                                                                              270                           320

Total Current Assets                                                                                 $7,720                            $6,210

 

Current Liabilitieis

Accounts payable                                                                                  $1,800                              $1,750

Salaries Payable                                                                                   $3,750                               $3,150

Total Current Liabilities                                                                       $5,550                             $4,900

Net income for the year ended Jan 30, 2011, was $425,000. Depreciation expense of $105,000 was included in the operating expenses for the year.

 

Requirement

Use the indirect method to prepare the cash from operations section of the statement of cash flows for Discovery Tech Corportation for the year ended June 30, 2011                                              

Sheet1

–

A

,

9

11

Amount

Amount

Amount

Amount

from operations

Amount

20

Amount

Net increase in cash

Craig’s Service Company

Statement of Cash Flows

0

Amount

31

Amount

Amount

Amount

Amount

Amount

Cash from investing activities

Purchase of equipment Amount

Cash from financing activities

Amount

Net increase in cash

46
49

																																																																																																																							Problem	9	49	A	Name
Section
B	C	D	E	F	G	H
5	Part 1. Direct method
6		Craig’s Service Company
7		Statement of Cash Flows
8	For the Year Ended December	31	20	11
Cash from operations:
10	Cash from customers	$ 94,000
Cash paid for advertising															Amount
12	Cash paid for employees
13	Cash paid for rent
14	Cash paid for supplies
15	Cash paid for taxes
16			Net increase in cash	Formula 1
17		Cash from investing activities
18		Purchase of equipment
19		Cash from financing activities
Dividends paid
21	Formula 2
22
23	Part 1. Indirect method
24
25
26	For the Year Ended December 31, 2011
27
28	Cash from operating activities
29	Net income	$ 5,	46
30	Add depreciation
Decrease in accounts receivable
32	Decrease in supplies
33	Increase in prepaid advertising
34	Decrease in wages and salaries payable
35	Increase in taxes payable
36	Net increase in cash from operations	Formula 3
37
38
39
40	Payment of dividend
41	Formula 4
42	Parts 2,3,4
43	Type answers starting here
44
45
47
48	Part 5.	Free cash flow equals	Formula 5
50
End of Problem

&LReimers, Financial Accounting 3e
CyberCoach:
$10,610

Sheet2

Sheet3