Calculation of cash flows and calculation of why operating cash flows different from net income.
1. What question is the direct format of the statement of cash flows designed to answer?
2. What question is the indirect format of the statement of cash flows designed to answer? Explain.
3. The following information is available for Sentry Company for the first month of the year.
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Revenues
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$ 17,000
|
|
Expenses
|
8,000
|
|
Increase in accounts receivable
|
800
|
|
Decrease in inventory
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1,200
|
|
Decrease in supplies
|
400
|
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Increase in accounts payable
|
1,050
|
|
Decrease in wages payable
|
900
|
|
Depreciation expense
|
1,100
|
|
Patent expense
|
250
|
Determine the cash flow from operating activities for the month.