The income statement of Stellar Company is shown below. STELLAR COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,910,000 Cost of goods sold Beginning inventory $1,920,000 Purchases 4,420,000 Goods available for sale 6,340,000 Ending inventory 1,590,000 Cost of goods sold 4,750,000 Gross profit 2,160,000 Operating expenses Selling expenses 450,000 Administrative expenses 710,000 1,160,000 Net income $1,000,000 Additional information: 1. Accounts receivable decreased $370,000 during the year. 2. Prepaid expenses increased $170,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $280,000 during the year. 4. Accrued expenses payable decreased $110,000 during the year. 5. Administrative expenses include depreciation expense of $60,000. Prepare the operating activities section of the statement of cash flows using the direct method.
The income statement of Stellar Company is shown below.
STELLAR COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2020
Sales revenue
$6,910,000
Cost of goods sold
Beginning inventory
$1,920,000
Purchases
4,420,000
Goods available for sale
6,340,000
Ending inventory
1,590,000
Cost of goods sold
4,750,000
Gross profit
2,160,000
Operating expenses
Selling expenses
450,000
Administrative expenses
710,000
1,160,000
Net income
$1,000,000
Additional information:
1.
2. Prepaid expenses increased $170,000 during the year.
3. Accounts payable to suppliers of merchandise decreased $280,000 during the year.
4. Accrued expenses payable decreased $110,000 during the year.
5. Administrative expenses include
Prepare the operating activities section of the statement of
STELLAR COMPANY
Statement of Cash Flows (Partial)
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