E23.5 (LO2, 3) (Preparation of Operating Activities Section-Direct Method) Norman NV's income statement for the year ended December 31, 2019, contained the following condensed information. \begin{tabular}{|l|r|r|} \hline Service revenue & & \( € 840,000 \) \\ \hline Operating expenses (excluding depreciation) & \( € 624,000 \) & \\ \hline Depreciation expense & 60,000 & \\ \hline Loss on sale of equipment & 26,000 & 710,000 \\ \hline Income before income taxes & & 130,000 \\ \hline Income tax expense & & 40,000 \\ \hline Net income & & \( € 90,000 \) \\ \hline \end{tabular} Norman's statement of financial position contained the following comparative data at December 31. \begin{tabular}{|l|r|r|} \hline & \multicolumn{1}{|c|}{\( \mathbf{2 0 1 9} \)} & \multicolumn{1}{c|}{\( \mathbf{2 0 1 8} \)} \\ \hline Accounts receivable & \( € 37,000 \) & \( € 59,000 \) \\ \hline Accounts payable & 46,000 & 31,000 \\ \hline Income taxes payable & 4,000 & 8,500 \\ \hline \end{tabular} (Accounts payable pertains to operating expenses.)
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The net income reported on the income statement for the current year was $\$ 210,000$. Depreciation recorded on equipment and a building amounted to $\$ 62,500$ for the year. Balances of the current asset and current liability accounts at the beginning and end of the year are as follows: \begin{tabular}{lrr} & End of Year & Beginning of Year \\ \hline Cash & $\$ 56,000$ & $\$ 59,500$ \\ Accounts receivable (net) & 71,000 & 73,400 \\ Inventories & 140,000 & 126,500 \\ Prepaid expenses & 7,800 & 8,400 \\ Accounts payable (merchandise creditors) & 62,600 & 66,400 \\ Salaries payable & 9,000 & 8,250 \end{tabular} a. Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the indirect method. b. If the direct method had been used, would the net cash flow from operating activities have been the same? Explain.
The current sections of Nasreen SA's statements of financial position at December 31, 2016 and 2017, are presented here. Nasreen's net income for 2017 was €147,000. Depreciation expense was €21,000. Instructions: Prepare the net cash provided by operating activities section of the company's statement of cash flows for the year ended December 31, 2017, using the indirect method.
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