Exercise 23-3 The income statement of Sheridan Company is shown below. SHERIDAN
ID: 2549945 • Letter: E
Question
Exercise 23-3 The income statement of Sheridan Company is shown below.
SHERIDAN COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $6,630,000Cost of goods sold Beginning inventory $1,840,000Purchases 4,520,000 Goods available for sale 6,360,000 Ending inventory 1,530,000 Cost of goods sold 4,830,000 Gross profit 1,800,000 Operating expenses Selling expenses 450,000 Administrative expenses 660,000 1,110,000 Net income $690,000 Additional information:
1. Accounts receivable decreased $290,000 during the year.
2. Prepaid expenses increased $180,000 during the year.
3. Accounts payable to suppliers of merchandise decreased $260,000 during the year.
4. Accrued expenses payable decreased $120,000 during the year.
5. Administrative expenses include depreciation expense of $60,000.
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2017, for Sheridan Company, using the indirect method.
Explanation / Answer
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2017, for Sheridan Company, using the indirect method.
Net income 690000 Adjustment to reconcile net income Depreciation 60000 Account receivable decrease 290000 Prepaid expense increase (180000) Account payable decrease (260000) Accured expense decrease (120000) (210000) Net cash flow from operating activities 480000Related Questions
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