contestada

Total Assets
Sales
Task 3: Preparing a Cash Flow Statement
Nikea Inc.'s income statement for the year 2013 is shown below:
During the year, the balances for the sales account, cost of goods sold, and gross profit
increased. This information is provided to you. Prepare the cash flow for operating activities,
using both the direct method and the indirect method.
Accounts
Nikea's income statement for the year 2013 is shown below.
Cost of Goods Sold
Gross Profit
Operating Expenses
Deprecation
Styles
Net Income
934,000 Total Liability & Stockholders Equity
Type your response here:
Amount ($)
600,000
14
(400,000)
200,000
(30,000)
(20,000)
150,000
934,000
4
Editin

Respuesta :

anthougo

The preparation of the Cash Flow Statement for Nikea Inc. for the year ended December 31, 2013, is as follows:

Direct Method:

Nikea Inc.

Cash Flow Statement

Cash received from customers  $600,000

Cash paid to suppliers of goods (400,000)

Cash paid to vendors of servides (30,000)

Cash from operating activities    $170,000

Indirect Method:

Nikea Inc.

Cash Flow Statement

For the year ended December 31, 2013

Net income                                $150,000

Add non-cash expenses:

Depreciation                                 20,000

Cash from operating activities $170,000

What is the difference between the direct method and the indirect method of Cash Flow Statement?

The direct method of preparing the Cash Flow Statement starts with the operating income and adds the non-cash expenses to obtain the cash flow from operating activities.

On the other hand, the indirect method reconciles the accounts receivable and payable to extract the exact cash flows received from customers or paid to suppliers of goods and services.

Both methods of determining the cash flow from operating activities yield the same result.

Data and Calculations:

Nikea’s income statement for the year 2013

Sales                          $600,000

Cost of Goods Sold   (400,000)

Gross Profit                 200,000

Operating Expenses   (30,000)

Deprecation                (20,000)

Net Income                 150,000

Learn more about the direct and indirect methods of cash flow statements at https://brainly.com/question/5256701

#SPJ1

Otras preguntas