Repeat the requirements in P22-3 using the indirect method.

In P22-3

Westhoff, Incorporated provided the following balance sheets and income statement for the current year. Prepare the operating activities section of the cash flow statement using the direct method. Assume accrued expenses relate to selling, general and administrative expenses. All acquisitions of property, plant and equipment were made using cash.

                        Westhoff, Incorporated

                            Income Statement

                For the Year Ended December 31

Sales……………………………………………………..      $ 80,085

Cost of Goods Sold……………………………………..      48,051

Gross Profit………………………………………………     $ 32,034

Selling, General, and Administrative Expenses…………      $ 10,700

Depreciation Expense……………………………………     2,400

Total Operating Expenses………………………………..     $ 13,100

Income before Interest and Taxes……………………….     $ 18,934

Interest Expense…………………………………………     $ (4,000)

Interest Revenue………………………………………....     3,400

Income before Tax……………………………………….     $ 18,334

Income Tax Expense……………………………………..     (7,334)

Net Income………………………………………………      $ 11,000

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Westhoff, Incorporated Balance Sheet At December 31 Assets Ending Beginning Current Assets Cash Accounts Recevable, net Merchandise inventony Prepaid Insurance S 7000 3,500 8,000 4,000 2,200 S19.500 17700 8,500 2,300 1,700 Total Current Assets Noncurrent Assets Investments Property, Plant, and Equipment- net $ 12,000 24.300 S 87000 92.300 75,000 58,000 Total Noncurrent Assets Total Assets Liabilities Current Liablities Accounts Payable Accrued Expenses Income Taxes Payable 9,800 6,000 $ 20,300 $ 1,000 5,120 4,850 s 10,970 Total Current Liabilities Noncurrent Liabilities Notes Payable s 31,000 $ 31.000 S51,300 42,630 S 42,630 $ 53,600 Total Noncurrent Liabilities Total Liabilities Shareholders' Equity Common Stock, S1 par value Additional Paid-in Capital Retained Earmings S 9,000 20,000 26,200 $ 55,200 $106,500 9,000 20,000 17400 46,400 $100,000 Total Shareholders Equity Total Liabilities and Sharehdlders Equity