New Vision Company completed its income statement and balance sheet and provided the following information:

Service Revenue $66,000

Expenses:
Salaries and Wages $42,000
Depreciation 7,300
Utilities 6,000
Office 1,700 57,000
Net Income $9,000
Decrease in Accounts Receivable $12,000
Paid Cash for Equipment 5,000
Increase in Salaries and Wages Payable 9,000
Decrease in Accounts Payable 4,250

Required:

1. Present the operating activities section of the statement of cash flows for New Vision Company using the indirect method
2 Of the potential causes of differences between cash flow from operations and net income, which are the most important to financial analysts?

2.Changes that occured in the management of a company or organisation operating activities as well as those that occured in revenue and expense recognition .

Explanation:

New Vision Company operating activities section of the statement of cash flows

(INDIRECT METHOD)

Cash flow from operating activity :

Net Income 9,000

Adjustment to reconcile net income to cash provided by operating activities:

Depreciation 7300

Change in current assets and current liabilities:

Decrease in account receivable 12,000

Increase in salaries payable 9,000

Decrease in account payable (4,250)

(12,000+9,000-4,250) 16,750

Cash flow from operating activity (9,000+7,300+16,750) 33,050

2.Changes that occured in the management of a company or organisation operating activities as well as those that occured in revenue and expense recognition .