Presented below is the income statement of Jennifer, Inc.:Sales revenue $389,500Cost of goods sold 226,000Gross profit $163,500Operating expenses 91,900Income before income taxes 71,600Income taxes 24,600Net income $ 47,000In addition, the following information related to net changes in working capital is presented: Debit CreditCash $12,800 Accounts receivable 24,600 Inventories $19,800Salaries payable (operating expenses) 7,500 Accounts payable 13,700Income taxes payable 2,600 The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $3,000. Prepare a schedule computing the net cash flow from operating activities by using the direct method that would be shown on a statement of cash flows.Jennifer, Inc.Statement of Cash Flows (Partial)Direct Method $ $ $

The question is based on the concept of cashflow statement.

Answered: Presented below is the income statement…

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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Presented below is the income statement of Jennifer, Inc.:

Sales revenue		$389,500
Cost of goods sold		226,000
Gross profit		$163,500
Operating expenses		91,900
Income before income taxes		71,600
Income taxes		24,600
Net income		$ 47,000

In addition, the following information related to net changes in working capital is presented:

	Debit	Credit
Cash	$12,800
Accounts receivable	24,600
Inventories		$19,800
Salaries payable (operating expenses)	7,500
Accounts payable		13,700
Income taxes payable	2,600

The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $3,000.

Prepare a schedule computing the net cash flow from operating activities by using the direct method that would be shown on a statement of cash flows.

Jennifer, Inc. Statement of Cash Flows (Partial) Direct Method

		$
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