Cullumber Company completed its first year of operations on December 31, 2017. I

Question

Cullumber Company completed its first year of operations on December 31, 2017. Its initial income statement showed that Cullumber Company had sales revenue of $526,284 and operating expenses of $220,614. Accounts receivable and accounts payable at year-end were $159,480 and $61,134, respectively. Assume that accounts payable related to operating expenses. Ignore income taxes.

Compute net cash provided (used) by operating activity 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

Cash receipts from customers(526284-159480) 366804 Cash payments to suppliers(220614-61134) (159480) Net cash provided by operating activity $207324.

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