Chapter 13, Problem 13.3AP

The income statement of Whitlock Company is presented here.

WHITLOCK COMPANY

Income Statement

For the Year Ended November 30, 2017

Sales revenue		$7,700,000
Cost of goods sold
Beginning inventory	$1,900,000
Purchases	4,400,000
Goods available for sale	6,300,000
Ending inventory	1,400,000
Total cost of goods sold		4,900,000
Gross profit		2,800,000
Operating expenses		1,150,000
Net income		$1,650,000

Additional information:

1. Accounts receivable increased $200,000 during the year, and inventory decreased $500,000.

2. Prepaid expenses increased $150,000 during the year.

3. Accounts payable to suppliers of merchandise decreased $340,000 during the year.

4. Accrued expenses payable decreased $100,000 during the year.

5. Operating expenses include depreciation expense of $70,000.

Instructions

Prepare the operating activities section of the statement of cash flows for the year ended November 30, 2017, for Whitlock Company, using the indirect method.