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The following information is taken from the operating section of the statement of cash flows direct method of Battery Builders Inc Collections from customers

The following information is taken from the operating section of the statement of cash flows (direct method) of Battery Builders, Inc.:Collections from customers ………… $28,000Payments to suppliers for purchases …….. (13,000)Payments for operating expenses ……… (9,000)Payments for current period income taxes ……. (4,000)Cash provided by operating activities …….. 2,000The following information is obtained from the income statement of Battery Builders:Net income ……………….. $4,000Depreciation expense …………… 4,000Gain on sale of equipment …………. 2,000Write-off of intangibles ………….. 1,000In addition, the following information is obtained from the comparative balance sheets of Battery Builders (decreases in parentheses):Change in accounts receivable ………… $ 3,000Change in inventory ……………. 3,000Change in accounts payable ………….. 2,000Change in accrued payable (related to operating expense) . (2,000)Change in deferred income taxes payable …….. 1,000Required:1. Prepare a complete accrual-basis income statement for the current year.2. Compute the cash flows from operations using the indirect approach (that is, start with accrual-basis net income and adjust for various items to obtain cash flows from operations).

May 14 2020 View more View Less

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