The income statement of Headland Company is shown below. HEADLAND COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,940,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,350,000 Goods available for sale 6,260,000 Ending inventory 1,600,000 Cost of goods sold 4,660,000 Gross profit 2,280,000 Operating expenses Selling expenses 450,000 Administrative expenses 710,000 1,160,000 Net income $1,120,000 Additional information: 1. Accounts receivable decreased $390,000 during the year. 2. Prepaid expenses increased $150,000 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 operating activities section of the statement of cash flows using the direct method. HEADLAND COMPANY Statement of Cash Flows (Partial) choose the accounting period select an opening section name select an item $enter a dollar amount select an item $enter a dollar amount select an item enter a dollar amount enter a subtotal of the two previous amounts select a closing section name

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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HEADLAND COMPANY Statement of Cash Flows (Partial) choose the accounting period
select an opening section name
select an item		$enter a dollar amount
select an item	$enter a dollar amount
select an item	enter a dollar amount
		enter a subtotal of the two previous amounts
select a closing section name

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HEADLAND COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020
Sales revenue		$6,940,000
Cost of goods sold
Beginning inventory	$1,910,000
Purchases	4,350,000
Goods available for sale	6,260,000
Ending inventory	1,600,000
Cost of goods sold		4,660,000
Gross profit		2,280,000
Operating expenses
Selling expenses	450,000
Administrative expenses	710,000	1,160,000
Net income		$1,120,000

1.		Accounts receivable decreased $390,000 during the year.
2.		Prepaid expenses increased $150,000 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.