The income statement of Paxson Company is presented here. Accounts receivable de

Question

The income statement of Paxson Company is presented here. Accounts receivable decreased $448,700 during the year, and inventory decreased $882,000. Prepaid expenses increased $152,700 during the year. Accounts payable to suppliers of merchandise decreased $352,900 during the year. Accrued expenses payable decreased $109,100 during the year. Administrative expenses include depreciation expense of $160,800. Prepare the operating activities section of the statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

Statement showing cash flow from Operating Activities under Direct Method Particulars Amount Cash Flow from Operating Activities Cash Receipts from Customers          8,079,800.00 Cash payments for Operating Expense       (1,276,500.00) Cash payment to suplliers       (4,588,500.00) Net Cash provided by operating Activities          2,214,800.00 Sales          7,631,100.00 Decrease in Accounts Receivable             448,700.00 Total Collections from customers          8,079,800.00 Purchases          4,235,600.00 Decrease in AP             352,900.00 Total Payments to Suppliers          4,588,500.00 Selling Expenses             431,900.00 Admin Expense             743,600.00 Add : Prepaid Exp             152,700.00 Less Depreciation           (160,800.00) Add: Acccrued Exp Payable Dec             109,100.00 Net Payment for Operating Exp          1,276,500.00

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