The income statement of Shamrock Company is shown below SHAMROCK COMPANY INCOME

Question

The income statement of Shamrock Company is shown below SHAMROCK COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $6,610,000 Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory Cost of goods sold $1,910,000 4,530,000 6,440,000 1,630,000 4,810,000 1,800,000 Gross profit Operating expenses 450,000 680,000 Selling expenses 1,130,000 $670,000 Administrative expenses Net income Additional information: 1. Accounts receivable decreased $300,000 during the year. 2. Prepaid expenses increased $180,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $280,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $70,000.

Explanation / Answer

Cash flow from operating activities :

Net income 670000 Adjustment to reconcile net income To operating activities Decrease account receivable 300000 Increase prepaid expense -180000 Decrease account payable -280000 Decrease accured expense payable -110000 Decrease inventory 280000 Depreciation 70000 80000 Net cash flow from operating activities 750000

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