Question

Cash flows from operating activities for both the indirect and direct methods are presented for Reverse Logic. All amounts are in thousands (000s). 10 points 165 eBook 53 (29) 41 (5) (17) References Cash Flows from Operating Activities (Indirect method) Net income Adjustments to reconcile net income to net cash flows from operating activities: Depreciation expense Increase in accounts receivable Decrease in inventory Increase in prepaid rent Decrease in accounts payable Decrease in income tax payable Net cash flows from operating activities Cash Flows from Operating Activities (Direct method) Cash received from customers Cash paid to suppliers Cash paid for operating expenses Cash paid for income taxes Net cash flows from operating activities $ 199 $ 4,025 (2,582) (1,154) (90) $199

The answers I have are wrong.

Answer 1

Answer:

REVERSE LOGIC
Income Statement
For the year Ended December 31, 2021
Net Sales		$        4,054
Expenses
Cost of Goods sold	$        2,606
Operating Expense	$        1,149
Depreciation expense	$              53
Income tax expense	$              81
Total expense	$        3,889	$        3,889
Net Income		$           165

Detailed workings

Calculation of Sales
Received from accounts receivable	4025
Add: Increase in accounts receivable	29
Total sales	4054
Calculation of Purchases and cost of Goods sold
Cash Paid to Suppliers	2582
Less: Decrease in accounts payable	17
Purchases during the year	2565
Add: Decrease in inventory	41
Cost of goods sold	2606
Calculation of operating expenses
Cash paid for operating expense	1154
Less: Increase in prepaid expense	5
Expense for current year	1149
Calculation of Taxes
Cash paid for income tax	90
Less: Decrease in income tax payable	9
Income tax for current year	81