Reference no: EM132602872

Entity O reported net income of $225,000 for the current year. Depreciation recorded on buildings and equipment amounted to $75,000 for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows:

                           End of Year                   Beginning of Year

Cash                         $20,000                     $15,000

Accounts receivable      22,000                      32,000

Inventory                    72,000                      60,000

Accounts payable           12,000                    18,000

Taxes payable                  5,000                      3,000

Instructions

Question 1: Prepare the cash flows from the operating activities section of the statement of cash flows using the indirect method.