Nordstrom, Inc., the Seattle-based fashion retailer, had the following income st

Question

Nordstrom, Inc., the Seattle-based fashion retailer, had the following income statement for the year ended January 28, 2012 ( in millions): Total revenues Costs and expenses $10,877 $6,592 3,036 130 Cost of sales and related buying and occupancy costs Selling, general, and administrative Interest expense Total costs and expenses Earnings before income taxes Income taxes Net earnings 9,758 1,119 436 $683 The company's net cash provided by operating activities, prepared using the indirect method, was as follows ($ in millions): $ 683 Net earnings Adjustments to reconcile net earnings to net cash provided by operating activities Depreciation, amortization, and other noncash expenses 488 Changes in Accounts receivable Merchandise inventories Accounts payable Accrued salaries, wages, and related benefits Other liabilities (98) (137) 54 6 181 Net cash provided by operating activities Prepare a statement showing the net cash provided by operating activities using the direct method. Assume that accrued salaries, wages, and related benefits and other liabilities relate to selling, general, and administrative expenses, as do all components of depreciation, amortization, and other noncash expenses

Explanation / Answer

Working:

Nordstrom, Inc., Cash Flow Statement (Partial) For the Year Ended January 28, 2012 $ in millions Cash Flows from Operating Activities: Cash receipts: Cash received from customers 10779 Cash payments: Cash paid for merchandise -6675 Cash paid for selling, general, and administrative expenses -2361 Cash paid for interest expense -130 Cash paid for income taxes -436 -9602 Net cash provided by operating activities 1177

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