Solution-Prepare a schedule computing the net cash flow

Prepare a schedule computing the net cash flow

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Reference no: EM131877440

Question - Cash flows from operating activities (indirect and direct methods). Presented below is the income statement of Smiling Tiger, Inc.

Sales	$1,020,000
Cost of goods sold	640,000
Gross profit	$380,000
Operating expenses	230,000
Income before income taxes	150,000
Income taxes	60,000
Net income	$90,000

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

	Debit	Credit
Cash	$50,000
Accounts receivable	34,500
Inventories		$25,000
Salaries payable (operating expenses)	60,000
Accounts payable		450,000
Income taxes payable	12,000

Depreciation expense for the year was $54,000.

Deferred tax liability account increased $6,500.

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: EM131877440

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Prepare a schedule computing the net cash flow

Reference no: EM131877440

Reference no: EM131877440

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