Operating Cash Flows (Direct Method) The Howell Company\'s current year income s

Question

Operating Cash Flows (Direct Method) The Howell Company's current year income statement contains the following data: inciples Sales revenue $925,000 Cost of goods sold 551,000 Gross profit $374,000 Howell's comparative balance sheets show the following data (accounts payable relate to merchandise purchases): End of Year Beginning of Year Accounts receivable $71,00060,000 inventory Prepaid expenses3,000 Accounts payable 3100037,000 109,000 96,000 Compute Howell's current-year cash received from customers and cash pald for merchandise purchased Cash received from customera pter 11 Casn paid for merchandise purcheses

Explanation / Answer

Cash received from customers = Opening balance + sales - closing balance

= 60000+ 925000 - 71000 = 914000

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