Financial accounting question: Portions of the financial statements for Peach Co

Question

Financial accounting question:

Portions of the financial statements for Peach Computer are provided below PEACH COMPUTER Income Statement For the year ended December 31, 2018 $1,975,000 Net sales Expenses Cost of goods sold Operating expenses Depreciation expense Income tax expense $1,120,000 630,000 57,000 47,000 Total expenses 1,854,000 Net income $ 121,000 PEACH COMPUTER Selected Balance Sheet Data December 31 Increase (1) or 2017 Decrease (D) $20,500 (I) 6,800 (D) 23,500 (I) 2,700 (D) 11,500 (I) 7,800 (D) 2018 Cash Accounts receivable Inventory Prepaid rent Accounts payable Income tax payable $109,000 $88,500 45,700 52,500 82,000 58,500 3,700 6, 6,400 52,000 40.500 5,700 13,500

Explanation / Answer

Operating activity section of statement of cash flow for peach computer using indirect method

Cash flow from operating activities EBIT operating income $121,000 Depreciation expenses $57,000 Income tax expenses $47,000 decrease in accounts receivable ($6,800) Increase in inventory $23,500 Decrease in prepaid rent ($2,700) Increase in accounts payable $11,500 Decrease in income tax payable ($7,800) Net cash flow from operating activity $242,000

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