E 13-25 Neil brown is the proprietor of a small company. The results of operations for last year are shown,

E 13-25 Cash flows from operations (Direct Method)

E 13-25 Neil brown is the proprietor of a small company. The results of operations for last year are shown, along with selected balance sheet data.  From the info, determing the amount of net cash flows provided from operations, using the direct method.  After completing, show how the amount of net cash flows from operating activities would be calculated using the indirect method.  

Sales revenue           $510,000

Cost of goods sold       320,000

Gross Margin                                           $190,00

Operating expenses

     Wages expense         75,000

     Utilities expense       2,500

     Rent expense          35,400

     Insurance expense        6,900           $119,800

Net income                                                 70,200

Beginning of year            End of year

Accounts receivable (net)          $42,000                      $39,000

Inventory                                      38,000                        39,000

Prepaid Insurance                          2,200                         1,800

Accounts payable                         16,000                       19,000

Wages payable                            10,000                          8,800

                                                CLICK HERE FOR SOLUTION