The following accounts and corresponding balances were drawn from Pixi Company’s 2017 and 2016 year-end balance sheets:
Account Title 2017 2016
Accounts receivable………………………. $62,000…… $56,000
Interest receivable…………………………… 8,000……… 6,000
Other operating expenses payable…………. 26,000……. 29,000
Salaries payable……………………………. 12,000……… 9,000
The 2017 income statement is shown below:
Income Statement
Sales…………………………………………………….. $ 650,000
Salaries expense………………………………………… (420,000)
Other operating expenses………………………………. (110,000)
Operating income………………………………………… 120,000
Nonoperating items: Interest revenue……………………… 15,000
Net income……………………………………………… $ 135,000
Required
a. Use the direct method to compute the amount of cash inflows from operating activities.
b. Use the direct method to compute the amount of cash outflows from operating activities.
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