Question

Required:

1

Prepare the journal entries to record these transactions. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)

1a. Record the sales revenue of $220 for cash and $120 on account and record the cost of goods sold of $133 using one journal entry.

1b. Record the salaries and wages expense of $90.

2. Calculate the amount that should be reported as net cash flow from operating activities. 3. Calculate the amount that should be reported as net income. 4. Show how the indirect method would convert net income (requirement 3) to net cash flow from operating activities (requirement 2).

-net income

-increase in accounts receivable

-decrease in inventory

-increase in salaries and wages payable

-net cash flow from operating activities

Answer 1