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1 Habbt AaBbcc AaBbcc AaBbcc AaBbcc Emphasis T Heading 1 Heading 2 T Heading 3 T Heading 4 T Heading 5 e Find She Replace Sty
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a. Operating expenses recognized during the year 6 $78,000
Beginning Accounts payable balances $          25,000.00
Plus : Incurred during the year (18000+85000-25000) $          78,000.00
Minus paid during the year $          85,000.00
Ending Accounts Payable balance $          18,000.00
b. Income earned during the period $37,000
Revenue   $        115,000.00
Less: Expenses  
Operating expenses   $          78,000.00
Net Income   $          37,000.00
c. Cash flow from operating activities   $30,000.00
Net Income   $          37,000.00
Less: Decrease in accounts payable   $             7,000.00
Cash flow from operating activity   $          30,000.00

d. The amounts in requirement b and c differ because in calculating net income all the expenses incurred

are considered. However in operating cash flow only amount involving payment or receipt of cash is considered.

While calculating Operating cash flow, decrease in accounts payable are decreased from net income  
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