Sage Corporation had the following 2017 income statement. Sales revenue Cost of

Question

Sage Corporation had the following 2017 income statement. Sales revenue Cost of goods sold Gross profit Operating expenses (includes depreciation of $19,000) Net income $188,000 111,000 77,000 52,000 25,000 The following accounts increased during 2017: Accounts Receivable 12,000, Inventory $12,000. Accounts Payable $13,000. Prepare the cash flows from operating activities section of Sage's 2017 statement of cash flows using the direct method. Sage Corporation Statement of Cash Flows-Direct Method (Partial)

Explanation / Answer

Statement of Cash flow Direct method

Cash flow from Operating activities

Cash Received from Customers (188,000-12,000) $176,000

Cash payment to Suppliers (1,11,000-13,000+12,000) $110,000

Cash payment for operating expenses (52,000-19,000) $33,000

NET CASH PROVIDED BY OPERATING ACTIVITY $33,000

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