Chapter+22+Lesson+_2+outline

Chapter+22+Lesson+_2+outline - Chapter 22...

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    Chapter 22 Chapter 22                                 Statement of Cash Flows Statement of Cash Flows
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2 Indirect Method: Example Indirect Method: Example Tax Consultants Inc. began operations on January 1, 2011. The income statement and balance sheet for year 2011 follow. Income Statement Revenues $ 125,000 Less: Operating expenses 85,000 Income before Tax 40,000 Less: Income Tax 6,000 Net Income $ 34,000 A dividend of $14,000 was declared during year.
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3 Indirect Method: Example Indirect Method: Example Balance Sheet Dec 31, 2011 Jan 1, 2011 Assets : Cash $ 49,000 $-0- Accounts Receivable 36,000 -0- Total $ 85,000 $-0- Liabilities and Shareholders’ Equity: Accounts Payable $ 5,000 $-0- Common Shares 60,000 -0- Retained Earnings 20,000 -0- Total $85,000 $-0-
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Operating Activities Operating Activities Net Income $34,000 Accounts Receivable +$ 36,000 Accounts Payable +$ 5,000 Accrual Basis Net Income $34,000 Less: Increase in A/R $ 36,000
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This note was uploaded on 12/16/2011 for the course ACTG 3P33 taught by Professor N-a during the Fall '08 term at Brock University.

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Chapter+22+Lesson+_2+outline - Chapter 22...

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