Problem

Cash flows from operations—indirect method The financial statements of Simon Co. include t...

Cash flows from operations—indirect method The financial statements of Simon Co. include the following items (amounts in thousands):

 

Income Statement

For the Year

Ended

December 31,

2011

Net income

  $420

Depreciation and amortization expense 

  320

 

 

Balance Sheets

At December 31

2011

2010

Accounts receivable

Inventory 

Accounts payable

Income taxes payable

  $125

  170

  80

  50

$170

 150

 90

 15

Required:

a. Calculate the net cash flow provided by operations for Simon Co. for the year ended December 31, 2011.


b. Explain why net income is different from the net cash provided by operations.

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