ex 22 72 cash flows from operating activities indirect and direct methods presented 4314517

ex 22 72 cash flows from operating activities indirect and direct methods presented 4314517

Ex. 22-72 Cash flows from operating activities (indirect and direct methods)

Presented below is the latest income statement of Oxford Ltd.:

Sales………………………………..$380,000

Cost of goods sold……………………….  225,000

Gross profit…………………………….$155,000

Operating expenses………………………    85,000

Income before income taxes………………..70,000

Income taxes…………………………..    28,000

Net income…………………………….$  42,000

In addition, the following information related to net changes in working capital is available:

   Debit  Credit

Cash…………………………………$12,000

Accounts receivable (net)………………….8,000

Inventories…………………………….$19,400

Salaries payable (operating expenses)…………6,000

Accounts payable………………………..9,000

Income tax payable………………………3,000

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.

Ex. 22-73 Choices of statement of cash flows categories under IFRS

Under IFRS, choices are allowed in the categorization of interest paid and received and dividends received. Explain what these choices are.

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