Brief Exercise 23-4 Whispering Corporation had the following 2017 income stateme

Question

Brief Exercise 23-4 Whispering Corporation had the following 2017 income statement. Sales revenue Cost of goods sold Gross profit Operating expenses (includes depreciation of $20,000) Net income 212 000 18.000 7,000 47,800 The following accounts increased during 2017: Accounts Receivable $11,000, Inventory $10,000, Accounts Payable $12,000. Prepare the cash flows from operating activities section of Whispering's 2017 statement of cash flows using the direct method. Whispering Corporation Statement of Cash Flows-Direct Method (Partial) Click if you would like to Show Work for this question: nShow Work

Explanation / Answer

Direct method Cash collected from customer Sales 212000 Increase in accounts receivable -11000 Cash collected from customer 201000 Less Cash paid to merchandise Cost of goods sold 118000 Increase in inventory 10000 Purchase accrual basis 128000 Increase in accounts payable -12000 Cash paid to merchandise 116000 Operating expense 47000 Depreciation -20000 Cash paid to operating expense 27000 Net cash flow from operating activities 58000

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