(Computation of Operating ActivitiesDirect Method) Presentedbelow are two indepe

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(Computation of Operating ActivitiesDirect Method) Presentedbelow are two independentsituations.Situation A:Chenowith Co. reports revenues of $200000 and operating expensesof $110000 in its first year of operations 2010. Accountsreceivable and accounts payable at year-end were $71000 and$39000 respectively. Assume that the accounts payable related tooperating expenses. Ignore income taxes.Instructions: Using the direct method compute net cash provided(used) by operating activities.Situation B:The income statement for Edgebrook Company shows cost of goods sold$310000 and operating expenses (exclusive of depreciation)$230000. The comparative balance sheet for the year shows thatinventory increased $21000 prepaid expenses decreased $8000accounts payable (related to merchandise) decreased $17000 andaccrued expenses payable increased $11000.InstructionsCompute (a) cash payments to suppliers and (b) cash payments foroperating expenses.

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