Pronghorn Company’s income statement for the year ended December 31, 2020, contained the following condensed information. Service revenue $841,000 Operating expenses (excluding depreciation) $624,000 Depreciation expense 59,000 Loss on sale of equipment 25,000 708,000 Income before income taxes 133,000 Income tax expense 40,000 Net income $93,000 Pronghorn’s balance sheet contained the following comparative data at December 31. 2020 2019 Accounts receivable $35,000 $53,000 Accounts payable 41,000 31,000 Income taxes payable 3,800 8,000 (Accounts payable pertains to operating expenses.) Prepare the operating activities section of the statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e. g. -15,000 or in parenthesis e. g. (15,000).)

Answer and Explanation:

The preparation of the operating activities section of the cash flow statement using the indirect method is presented below:

According to the scenario, The presentation is as follows

Cash flow from operating activities

Net income$93,000

Add - Loss on sale of investment$25,000

Add - Depreciation expense  $59,000

Add - Decrease in Accounts receivable($53,000-$35,000)  $18,000

Add - Increase in Accounts payable($41,000-$31,000)$10,000

Less - decrease in Income tax payable($3800-$8000)(4,200)

Net cash provided by the operating activities  $200,800

The inflow of cash represents in the positive sign and outflow of cash represents in the negative sign

in 2001, dell computer became the world’s largest personal computer vendor, continuing to

gain market share and post profits in an industry struggling with slumping sales and billions of

dollars in losses. dell sells 90% of its pcs directly to the final customer, largely bypassing the

reseller channel that accounts for most of the world’s pc sales. this direct customer relationship

is the key to dell’s business model, and provides distinct advantages over the indirect sales

model. dell’s direct relationship with the customer allows it to tailor its offerings to customer

needs, offer add-on products and services, and use the internet to offer a variety of customer

services. in addition, dell’s pcs are built to customers’ specifications upon receipt of an order,

giving dell additional advantages over indirect pc vendors who must try to forecast demand and

ship products based on those forecasts. dell’s direct sales and build-to-order model has achieved

superior performance in the pc industry in terms of inventory turnover, reduced overhead, cash

conversion, and return on investment (kraemer, et al., 2000).

explanation:

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know