1. In calculating direct method Net Operating Cash, cash received from customers is:

A. added

B. subtracted

2. What is the amount of cash paid for inventory?

A. 154,600

B. 365,000

c. 122,100

D. 187,100

The Perry Co. reported the following income statement for the year: Sales (100% credit) $365,000 Cost of goods sold 142,000 Gross profit 223,000 Operating expenses: Depreciation $39,400 Insurance expense 8,200 Salaries expense 76,000 123,600 Income before taxes $99,400 Income tax expense 7,250 Net income $92,150 Also during the year, the company's current assets and current liabilities changed as follows: Increase (Decrease) Cash $49,500 Accounts receivable (6,500) Inventory 12,600 Prepaid insurance 1,600 Accounts payable (100% 32,500 purchases) Salaries payable (2,400) Income taxes payable 1,650