The income statement of Elbert Company is presented here. EFG COMPANY Income Statement For the Year Ended November 30, 2010 Sales                                                                                                                $7,700,000 Cost of goods sold Beginning inventory                                                              $1,900,000 Purchases                                                                                 4,400,000 Goods available for sale                                                          6,300,000 Ending inventory                                                                     1,400,000 Total cost of goods sold                                                          4,900,000 Gross profit                                                                             2,800,000 Operating expenses                                                                 1,150,000 Net income                                                                            $1,650,000 Additional information: Accounts receivable increased $300,000 during the year, and inventory decreased $400,000. Prepaid expenses increased $270,000 during the year. Accounts payable decreased $430,000 during the year. Accrued expenses payable decreased $100,000 during the year. Operating expenses include depreciation expense of $90,000. Instructions Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2010, for EFG Company, using the indirect method.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The income statement of Elbert Company is presented here.

EFG COMPANY

Income Statement

For the Year Ended November 30, 2010

Sales                                                                                                                $7,700,000

Cost of goods sold

Beginning inventory                                                              $1,900,000

Purchases                                                                                 4,400,000

Goods available for sale                                                          6,300,000

Ending inventory                                                                     1,400,000

Total cost of goods sold                                                          4,900,000

Gross profit                                                                             2,800,000

Operating expenses                                                                 1,150,000

Net income                                                                            $1,650,000

Additional information:

  1. Accounts receivable increased $300,000 during the year, and inventory decreased $400,000.
  2. Prepaid expenses increased $270,000 during the year.
  3. Accounts payable decreased $430,000 during the year.
  4. Accrued expenses payable decreased $100,000 during the year.
  5. Operating expenses include depreciation expense of $90,000.

Instructions

Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2010, for EFG Company, using the indirect method. 

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