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Ch. 13 - Statement of Cash FlowsWorksheetSee all chapters
All Chapters
Ch. 1 - Introduction to Accounting
Ch. 2 - Transaction Analysis
Ch. 3 - Accrual Accounting Concepts
Ch. 4 - Merchandising Operations
Ch. 5 - Inventory
Ch. 6 - Internal Controls and Reporting Cash
Ch. 7 - Receivables and Investments
Ch. 8 - Long Lived Assets
Ch. 9 - Current Liabilities
Ch. 10 - Time Value of Money
Ch. 11 - Long Term Liabilities
Ch. 12 - Stockholders' Equity
Ch. 13 - Statement of Cash Flows
Ch. 14 - Financial Statement Analysis
Ch. 15 - GAAP vs IFRS

Concept #1: Direct Method: Cash Received from Customers

Concept #2: Direct Method: Cash Paid to Suppliers

Concept #3: Direct Method: Cash Paid for Operating Expenses

Example #1: Direct Method

Practice: ABC Company is preparing its Statement of Cash Flows using the direct method. The accountant gathered the following information: cash paid to suppliers was $140,000; sales revenue was $350,000; Accounts Receivable increased by $10,000 during the year; depreciation expense was $15,000; operating expenses totaled $80,000; Prepaid Expenses decreased by $8,000 during the year; and a loss on the disposal of plant assets equaled $6,000. What is the cash flow provided by operating activities?

Practice: During the year, cash paid to suppliers was $340,000. Cash received from customers was $580,000. Cash paid for operating expenses totaled $64,000. Depreciation expense totaled $16,000. The company also purchased equipment for $35,000. Using the direct method, what is the cash provided by operating activities?