Computing the net cash flow from operating activities

Assignment Help Operation Management
Reference no: EM13906152

Presented below is the income statement of Cowan, Inc.:

         Sales revenue                                                                         $380,000

         Cost of goods sold                                                                  225,000

         Gross profit                                                                             $155,000

         Operating expenses                                                                    85,000

         Income before income taxes                                                      70,000

         Income taxes                                                                              28,000

         Net income                                                                             $ 42,000

In addition, the following information related to net changes in working capital is presented:

                                                                                                              Debit                  Credit

         Cash                                                                                          $12,000

         Accounts receivable                                                                20,000

         Inventories                                                                                                                       $19,400

         Salaries payable (operating expenses)                                    8,000

         Accounts payable                                                                                                     14,000

         Income taxes payable                                                                3,000

The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.

Instructions

Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows:

(a) using the indirect method.

(b) using the direct method.

Reference no: EM13906152

Questions Cloud

Sales revenues and operating costs : Al's Brake Shop had sales revenues and operating costs in 2014 of $490,000 and $392,000, respectively. In 2015, Al's plans to expand the services it provides to customers to include lubrication services. Revenues are expected to increase by $135,000 ..
Use the same label for identical forces : Simply answer the questions in bold below the problem description, No need tonumerically solve either problem. Give each force on your FBD(s) a unique label, but use the same label for identical forces.
Strategic leadership and entrepreneurship : Strategic Leadership and Entrepreneurship
How much of loss is adrian able to deduct on her tax return : Assuming Adrian has no other capital gains or losses, how much of the loss is Adrian able to deduct on her year 4 tax return?
Computing the net cash flow from operating activities : The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2, Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cas..
The operating profits are expected to increase : In 2013, the MoreForLess Company had revenues of $2,300,000 and costs of $1,725,000. During 2014, MoreForLess will be introducing a new product line that is expected to increase sales revenue by $275,000 and costs by $190,000. Assuming no changes are..
Milestones schedule and critical risks assessment : Milestones Schedule and Critical Risks Assessment
What amount should arthur company pay for this investment : Arthur Company is considering investing in an annuity contract that will return $46,000 annually at the end of each year for 15 years. What amount should Arthur Company pay for this investment if it earns a 7% return, rounded to whole dollars?
Total overhead would increase : Farrow Co. expects to sell 150,000 units of its product in the next period with the following results.

Reviews

Write a Review

 

Operation Management Questions & Answers

  Why room cycle time and defect rate be negatively correlated

Why would room cycle time and defect rate be negatively correlated? Which technical feature has the strongest associations with the largest number of guest requirements?

  Illustrate what should coordinates of new factory be

Expected annual volumes expected to be shipped through three warehouses is forecast to be 20 million units through A, 100 million through B also 50 million through C. Utilizing centroid method, approximately illustrate what should coordinates of n..

  Consider the type of organizational structure

Why is it important for managers to carefully consider the type of organizational structure that they use to implement their strategies? Discuss the relationship between a firm’s strategy and its structure. Thoroughly support and substantiate your re..

  Your company has discovered that it must confront its

your company has discovered that it must confront its chronic project cost problems head-on in order to operate

  Operations management value of quality in an organization

Operations Management Value Of Quality In An Organization

  Discussion area to receive instructor approval

If you are using a project from a volunteer role or past employment, indicate that feature and specifically request feedback on the viability of your selection from your classmates.

  What is the resulting lcl value for the line

From the samples you determine the fraction defective is 0.006 and the standard deviation is 0.001. If the desired confidence level is 99.7 percent, what is the resulting LCL value for the line?

  What type of organizational structure would you propose

What type of organizational structure would you propose?

  Briefly discuss the type of facility layout

Briefly discuss the type of facility layout that would be most appropriate for each of these:

  Determine which of the possible root causes are probable

For one of the risks identified in Exercises 1 through 3 above, construct a cause and effect diagram to determine possible root causes. Determine which of the possible root causes are probable. Describe how you would test each probable root cause to ..

  Explain failures of quality for memorial hospital

Discuss ways that a hospital might measure quality. Be sure to explain your reasoning. Explain the potential costs and failures of quality for Memorial Hospital and discuss how each can be measured.

  Find the solution that minimizes moving costs

Find the solution that minimizes moving costs using Microsoft Excel. Illustrate what would you have to do to the costs to assure that A always sends a car to D as part of the optimal solution.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd