29 Jun Question The income statement of Rodriquez Company is shown below.
Question
The income statement of Rodriquez Company is shown below.
RODRIQUEZ COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012
Sales
$6,884,420
Cost of goods sold
Beginning inventory
$1,897,410
Purchases
4,478,260
Goods available for sale
6,375,670
Ending inventory
1,601,260
Cost of goods sold
4,774,410
Gross profit
2,110,010
Operating expenses
Selling expenses
448,740
Administrative expenses
695,660
1,144,400
Net income
$965,610
Additional information:
1. Accounts receivable decreased $317,330 during the year.
2. Prepaid expenses increased $160,690 during the year.
3. Accounts payable to suppliers of merchandise decreased $281,450 during the year.
4. Accrued expenses payable decreased $127,540 during the year.
5. Administrative expenses include depreciation expense of $56,710.
Prepare the operating activities section of the statement of cash flows using the direct method.
Situation A:
Chenowith Co. reports revenues of $191,900 and operating expenses of $111,340 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $82,360 and $37,200, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.
Using the direct method, compute net cash provided (used) by operating activities. (If an amount reduces the account balance then enter with negative sign.)
Net cash
providedused
by operating activities
$
Situation B:
The income statement for Edgebrook Company shows cost of goods sold $310,820 and operating expenses (exclusive of depreciation) $227,710. The comparative balance sheet for the year shows that inventory increased $23,390, prepaid expenses decreased $8,240, accounts payable (related to merchandise) decreased $18,620, and accrued expenses payable increased $11,740.
Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.
(a) Cash payments to suppliers
$
(b) Cash payments for operating expenses
$
Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.
FAIRCHILD COMPANY
COMPARATIVE BALANCE SHEET
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