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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 $

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 $

Financial Accounting: The Impact on Decision Makers
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.8MCP
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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 $
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 $
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