Patsy Corporation has estimated its activity for December 2008. Selected data from these estimated amounts are as follows:

Required:
1. Calculate accrual-basis net income for December.
2. On the basis of the preceding data, what is the net cash flow provided from operating activities for December?

Transcribed Image Text:

Sales $350,000 Gross profit (based on sales) 30% Increase in gross trade accounts receivable during month Change in accounts payable during month 10,500 -0- Increase in inventory during month 5,000 Variable selling, general, and administrative (SG&A) expenses include a charge for uncollectible accounts of 1% of sales; accounts receivable write-offs were $3,000 Total SG&A expenses are $35,000 per month plus 15% of sales Depreciation expense of $20,000 per month is included in fixed SG&A