Answer and Explanation:
The Preparation of cash flows from operating activities section using the direct method is shown below:-
Splish Brothers Inc.
Statement of Cash Flows using Direct method
For the Year ended 2020
Particulars Amount
Cash Flows from operating activities:
Cash collection from:-
Customers
($49,300 + $189,500) $238,800
Dividend Revenue $17,900 $256,700
Less: Cash payments for
Interest ($10,400)
Income Taxes (15,000)
Salaries and wages (57,700)
Operating Expenses ($28,400)
Cash payment to
Suppliers for Merchandise ($115,400) $226,900
Net Cash provided by operating activities $29,800
Since the cash payment reflects the cash outflow so this items would be represented in a negative sign and the cash collections reflects the cash inflow so this item would be represented in a positive sign
