Oregon Company disclosed the following information for its recent calendar year.
Revenues | $100,000 |
Expenses |
|
Salaries expense | 68,000 |
Utilities expense | 28,000 |
Depreciation expense | 29,200 |
Other expenses | 6,800 |
Net loss | $ (32,000) |
Accounts receivable decrease | $ 28,000 |
Purchased a machine | 20,000 |
Salaries payable increase | 26,000 |
Other accrued liabilities decrease | 16,000 |
Required
1. Prepare the operating activities section of the statement of cash flows using the indirect method.
2. What were the major reasons that this company was able to report a net loss but positive cash flow from operations?
3. Of the potential causes of differences between cash flow from operations and net income, which are the most important to investors?
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