The Washington Company owns no plant assets and had the following income statement for the year: Sales revenue $900,000 Cost of goods sold $470,000 Wages expense 120,000 Rent expense 50,000 Insurance expense 15,000 655,000 Net income $245,000 Additional information about the company includes: End of Year Beginning of Year Accounts receivable $54,000 $51,000 Inventory 60,000 76,000 Prepaid insurance 8,000 7,000 Accounts payable 24,000 18,000 Wages payable 7,000 11,000 Use the preceding information to calculate the cash flow from operating activities using the indirect method.
The Washington Company owns no plant assets and had the following income statement for the year: Sales revenue $900,000 Cost of goods sold $470,000 Wages expense 120,000 Rent expense 50,000 Insurance expense 15,000 655,000 Net income $245,000 Additional information about the company includes: End of Year Beginning of Year Accounts receivable $54,000 $51,000 Inventory 60,000 76,000 Prepaid insurance 8,000 7,000 Accounts payable 24,000 18,000 Wages payable 7,000 11,000 Use the preceding information to calculate the cash flow from operating activities using the indirect method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
The Washington Company owns no plant assets and had the following income statement for the year:
|
Sales revenue |
|
$900,000 |
|
Cost of goods sold |
$470,000 |
|
|
Wages expense |
120,000 |
|
|
Rent expense |
50,000 |
|
|
Insurance expense |
15,000 |
655,000 |
|
Net income |
|
$245,000 |
Additional information about the company includes:
|
|
End of Year |
Beginning of Year |
|
|
$54,000 |
$51,000 |
|
Inventory |
60,000 |
76,000 |
|
Prepaid insurance |
8,000 |
7,000 |
|
Accounts payable |
24,000 |
18,000 |
|
Wages payable |
7,000 |
11,000 |
Use the preceding information to calculate the
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