Cash flows from operating activities (indirect and direct methods)
Presented below is the latest income statement of Oxford Ltd.: In addition, the following information related to net changes in working capital is available: $\begin{array}{lc}
&\text { Debit}&\text { Credit}\
\text { Cash } & \$ 12,000 \
\text { Accounts rece ivable (net) }& 8,000 \
\text { Inventories }&&\$19,400 \
\text { Salar ies payable (operating expenses) } &6,000\
\text { Accounts payable } && 9,000 \
\text { Income tax payable. }&3,000
\end{array}$ Oxford Ltd. also reports that depreciation expense for the year was $ 13,700 and that the deferred tax liability account increased $ 2,600.
Instructions
Prepare a schedule calculating the net cash flow from operating activities that would be shown on a statement of cash flows:
a) using the indirect method.
b) using the direct method.

Question

Cash flows from operating activities (indirect and direct methods)
Presented below is the latest income statement of Oxford Ltd.:  In addition, the following information related to net changes in working capital is available: $\begin{array}{lc}
&\text { Debit}&\text { Credit}\
\text { Cash  } & \$ 12,000 \
\text { Accounts rece ivable (net) }& 8,000 \
\text { Inventories }&&\$19,400 \
\text { Salar ies payable (operating expenses) } &6,000\
\text { Accounts payable } && 9,000 \
\text { Income tax payable. }&3,000
\end{array}$ Oxford Ltd. also reports that depreciation expense for the year was $ 13,700 and that the deferred tax liability account increased $ 2,600.
Instructions
Prepare a schedule calculating the net cash flow from operating activities that would be shown on a statement of cash flows: 
a) using the indirect method.
b) using the direct method.

Quizplus · Accepted Answer

The Answer of Cash flows from operating activities (indirect and direct methods)
Presented below is the latest income statement of Oxford Ltd.:  In addition, the following information related to net changes in working capital is available: $\begin{array}{lc}
&\text { Debit}&\text { Credit}\
\text { Cash  } & \$ 12,000 \
\text { Accounts rece ivable (net) }& 8,000 \
\text { Inventories }&&\$19,400 \
\text { Salar ies payable (operating expenses) } &6,000\
\text { Accounts payable } && 9,000 \
\text { Income tax payable. }&3,000
\end{array}$ Oxford Ltd. also reports that depreciation expense for the year was $ 13,700 and that the deferred tax liability account increased $ 2,600.
Instructions
Prepare a schedule calculating the net cash flow from operating activities that would be shown on a statement of cash flows: 
a) using the indirect method.
b) using the direct method.

Cash Flows from Operating Activities (Indirect and Direct Methods) Presented

Cash Flows from Operating Activities (Indirect and Direct Methods)
Presented