The income statement of Vince Gill Company is shown below. VINCE GILL COMPANY IN
ID: 2455642 • Letter: T
Question
The income statement of Vince Gill Company is shown below.
VINCE GILL COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2014
$6,933,330
$1,891,170
4,392,230
6,283,400
1,601,860
4,681,540
2,251,790
455,840
709,380
1,165,220
$1,086,570
Additional information:
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, for Vince Gill Company, using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
VINCE GILL COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2014
$6,933,330
Cost of goods sold Beginning inventory$1,891,170
Purchases4,392,230
Goods available for sale6,283,400
Ending inventory1,601,860
Cost of goods sold4,681,540
Gross profit2,251,790
Operating expenses Selling expenses455,840
Administrative expenses709,380
1,165,220
Net income$1,086,570
Explanation / Answer
Answer:
Vince Gill Company
Partial Statement of Cash Flows
For the Year Ended December 31, 2014
Cash Flows from Operating Activities :
Net Income....................................................................................................... $ 1,086, 570
Depreciation Expenses,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,$ 59,200
Decrease in Account Receivable.........................$ 319,160
Decrease in Inventory.........................................$ 289,310
Increased in Prepaid expenses............................( $ 172,210 )
Decrease in Accounts payable............................( $ 266,680 )
Decrease in Accrued expenses Payable..............( $ 119,270 )
$ 109,510
Net Cash provided by Operating Activities...........................( $ 1,086,570 + $ 109,510 ) = $ 1,196,080
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