xYZ Corp ncome Statement the year ended December 31, 2010 Sales Cost of goods so

Question

xYZ Corp ncome Statement the year ended December 31, 2010 Sales Cost of goods sold Gross profit Operating expenses $ 6,000,000 Selling expenses 2,600,000 800,000 500.000 Administrative expenses Operating income interest expense income tax expense Net Income 300,000 1,300,000 50,000 $ 1, 170,000 ADDITIONAL INFORMATION Accounts receivable increased $300,000 during the year. 2 Prepaid expenses decreased $130,000 during the year 3. Accounts payable to suppliers of merchandise increased $250,000 during the year. 4 inventory increased $400,000 during the year Accrued expenses payable decreased $190,000 during the year. Administrative expenses include depreciation expense of $300,000 Interest payable increased S20.000 during the year. sbo00o 3000 Required : Prepare the Operating Activities section of Statement of Cash Flows using the Direct method.

Explanation / Answer

Working:

XYZ CORP. Statement of Cash Flows (Partial) For the Year Ended December 31, 2010 (Direct Method) Cash Flows from Operating Activities: Cash receipts from customers 5700000 Cash paid for merchandise -3550000 Cash paid for operating expenses -1060000 Cash paid for interest -30000 Cash paid for income taxes -80000 Net cash provided by operating activities 980000

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