The following income statement was drawn from the annual report of Norton Company: The amount of cash flow from operating activities is
A)$37,200
B)$36,000
C)$26,000
D)$24,800

Question

The following income statement was drawn from the annual report of Norton Company:  The amount of cash flow from operating activities is
A)$37,200 
B)$36,000 
C)$26,000 
D)$24,800

Quizplus · Accepted Answer

Using the direct method: $60,000 cash revenue - $24,000 cash operating expenses = $36,000
Using the indirect method: $11,200 net income - $1,200 gain + $20,000 depreciation expense + $6,000 interest payable = $36,000

The Following Income Statement Was Drawn from the Annual Report