QuestionThe income statement of Cheyenne Company is shown below.CHEYENNE COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2020Sales revenue $6,890,000Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000Gross profit 2,190,000Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000Net income $1,030,000Additional information:1. Accounts receivable decreased $350,000 during the year.2. Prepaid expenses increased $160,000 during the year.3. Accounts payable to suppliers of merchandise decreased $300,000 during the year.4. Accrued expenses payable decreased $90,000 during the year.5. Administrative expenses include depreciation expense of $50,000.Prepare the cash flow statement operating activities section using the direct method.

Answered: The income statement of Cheyenne…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The income statement of Cheyenne Company is shown below.

CHEYENNE COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020
Sales revenue		$6,890,000
Cost of goods sold
Beginning inventory	$1,910,000
Purchases	4,410,000
Goods available for sale	6,320,000
Ending inventory	1,620,000
Cost of goods sold		4,700,000
Gross profit		2,190,000
Operating expenses
Selling expenses	460,000
Administrative expenses	700,000	1,160,000
Net income		$1,030,000

Additional information:

1.		Accounts receivable decreased $350,000 during the year.
2.		Prepaid expenses increased $160,000 during the year.
3.		Accounts payable to suppliers of merchandise decreased $300,000 during the year.
4.		Accrued expenses payable decreased $90,000 during the year.
5.		Administrative expenses include depreciation expense of $50,000.

Prepare the cash flow statement operating activities section using the direct method.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Financial Reporting in Hyperinflationary Economies

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions