FAR 4

Question 1

Indirect Method Operating Cash Flows Formula

Answer 1

Net Income
+Depreciation
-Gains
+Losses
-Equity Earnings > $ Received
- Change in Operating Assets
+Change in Operating Liabilities

Question 2

Direct Method Out Flow Formula

Answer 2

COGS
+Inventory Increase
-Inventory Decrease
-Increase in A/P
+Decrease in A/P

Question 3

Direct Method In Flow Formula

Answer 3

Sales Per I/S
+Decrease in A/P
-Increase in A/P
+Increase in Deferred Revenue
-Decrease in Deferred Revenue