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The income statement of Pharoah Company is shown below. Pharoah Company Income Statement For the Year Ended December 31, 2025 Sales revenue $6,850,000 Cost of goods sold Beginning inventory $1,880,000 Purchases 4,410,000 Goods available for sale 6,290,000 Ending inventory 1,610,000 Cost of goods sold 4,680,000 Gross profit 2,170,000 Operating expenses Selling expenses 450,000 Administrative expenses 710,000 1,160,000 Net income $1,010,000 Additional information: 1. Accounts receivable decreased $380,000 during the year. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $260,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method. PHAROAH COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Cash Payments to Suppliers Cash Payments for Operating Expenses Net Cash Provided by Operating Activities $ 4670000 i 1370000 i $ 1190000

The income statement of Pharoah Company is shown below. Pharoah Company Income Statement For the Year Ended December 31, 2025 Sales revenue $6,850,000 Cost of goods sold Beginning inventory $1,880,000 Purchases 4,410,000 Goods available for sale 6,290,000 Ending inventory 1,610,000 Cost of goods sold 4,680,000 Gross profit 2,170,000 Operating expenses Selling expenses 450,000 Administrative expenses 710,000 1,160,000 Net income $1,010,000 Additional information: 1. Accounts receivable decreased $380,000 during the year. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $260,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method. PHAROAH COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Cash Payments to Suppliers Cash Payments for Operating Expenses Net Cash Provided by Operating Activities $ 4670000 i 1370000 i $ 1190000

Intermediate Accounting: Reporting And Analysis
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 2MC: The following information is available for Cooke Company for the current year: The gross margin is...
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The income statement of Pharoah Company is shown below. Pharoah Company Income Statement For the Year Ended December 31, 2025 Sales revenue $6,850,000 Cost of goods sold Beginning inventory $1,880,000 Purchases 4,410,000 Goods available for sale 6,290,000 Ending inventory 1,610,000 Cost of goods sold 4,680,000 Gross profit 2,170,000 Operating expenses Selling expenses 450,000 Administrative expenses 710,000 1,160,000 Net income $1,010,000 Additional information: 1. Accounts receivable decreased $380,000 during the year. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $260,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method. PHAROAH COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Cash Payments to Suppliers Cash Payments for Operating Expenses Net Cash Provided by Operating Activities $ 4670000 i 1370000 i $ 1190000
Transcribed Image Text:The income statement of Pharoah Company is shown below. Pharoah Company Income Statement For the Year Ended December 31, 2025 Sales revenue $6,850,000 Cost of goods sold Beginning inventory $1,880,000 Purchases 4,410,000 Goods available for sale 6,290,000 Ending inventory 1,610,000 Cost of goods sold 4,680,000 Gross profit 2,170,000 Operating expenses Selling expenses 450,000 Administrative expenses 710,000 1,160,000 Net income $1,010,000 Additional information: 1. Accounts receivable decreased $380,000 during the year. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $260,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method. PHAROAH COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Cash Payments to Suppliers Cash Payments for Operating Expenses Net Cash Provided by Operating Activities $ 4670000 i 1370000 i $ 1190000
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