Ferragosto Services Ltd provided the following

comparative balance sheets and #3351

Ferragosto Services, Ltd. provided the following comparative balance sheets and income
statement for the current year.Ferragosto Services, Ltd.Income StatementFor the Year Ended
December, 31 Current YearService Revenue……………………………………….. $ 707,475Selling, Gene
Administrative Expenses………... (280,100)Depreciation Expense…………………………………... (75,90
Debt Expense……………………………………… (20,000)Income before Interest and Taxes………………
331,475Interest Expense………………………………………… (25,000)Income before Tax…………………
306,475Tax at 40%......................................................................... (122,590)Net
Income……………………………………………… $ 183,885Additional Information:1. Ferragosto included
24,150 loss on disposal of investments in Selling, General, and Administrative Expenses on the
income statement.2. Accrued liabilities relate to Selling, General and Administrative
Expenses.3. All dividends declared are paid in cash.4. All interest and taxes are paid in cash.5.
Acquisitions of land and property, plant and equipment used cash only.RequiredPrepare
Ferragosto’s cash flow statement for the current year under the indirect method. Assume
accrued liabilities relate to Selling, General and Administrative ExpensesView Solution:
Ferragosto Services Ltd provided the following comparative balance sheets and

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