5A Use the direct method to determine cash flows from operating activities
The following accounts and corresponding balances were drawn from Berry Company's 2012 and 2011 year-end balance sheets.
Account Title | 2012 | 2011 |
Accounts receivable | $46,000 | $42,000 |
Interest receivable | 5,000 | 6,000 |
Other operating expenses payable | 27,000 | 22,000 |
Salaries payable | 12,000 | 15,000 |
The 2012 income statement is shown below:
Income Statement | |
Sales | $680,000 |
Salary expense | (172,000) |
Other operating expenses | (270,000) |
Operating income | 238,000 |
Nonoperating items: Interest revenue | 24,000 |
Net income | $262,000 |
Required
a. Use the direct method to compute the amount of cash inflows from operating activities.
b. Use the direct method to compute the amount of cash outflows from operating activities.
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