Question

Suppose your company reports $220 of net income and $52 of cash dividends paid, and its comparative balance sheet indicates the following. Beginning Ending Cash $ 47 $ 267 Accounts Receivable 135 237 Inventory 305 197 Total $ 487 $ 701 Salaries and Wages Payable $ 22 $ 110 Common Stock 160 118 Retained Earnings 305 473 Total $ 487 $ 701 Required: 1. Prepare the operating activities section of the statement of cash flows, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.

Answer 1

Statement of Cash Flow
Particulars	Amount	Total Amount
Income	220.00
Increase in AR	(102.00)
Decrease in inventory	108.00
Increase in Salaries and wages payable	88.00
Cash flow from operating activities		314.00
Note - Dividend and common stock are financing activities