Answered: Prepare the Cash Flows from (used for)…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Cash Flows from (used for) Operating Activities—Direct Method The income statement for Stallion Company for the current year ended June 30 and balances of selected accounts at the beginning and end of the year are as follows: Sales $374,500 Cost of merchandise sold 129,500 Gross profit $245,000 Operating expenses: Depreciation expense $32,400 Other operating expenses 96,910 Total operating expenses 129,310 Income before income tax $115,690 Income tax expense 33,290 Net income $82,400 End of Year Beginning of Year Accounts receivable (net) $30,510 $26,260 Inventories 77,670 67,500 Prepaid expenses 12,210 13,320 Accounts payable (merchandise creditors) 56,780 52,710 Accrued expenses payable (operating expenses) 16,090 17,600 Income tax payable 3,700 3,700 Prepare the Cash Flows from (used for) Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Stallion Company Cash Flows from Operating Activities Section For the year ended on June 30 Cash flows from (used for) operating activities: $- Select - - Select - - Select - - Select - Net cash flow from operating activities $fill in the blank 9 Check My Work

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