Analyzing Operating Cash Flows (Direct Method) Lincoln Company owns no plant assets and reported the following income statement for the current year:

Sales		$600,000
Cost of goods sold	$376,000
Wages expense	88,000
Rent expense	33,600
Insurance expense	12,000	509,600
Net income		$90,400

	End of Year	Beg. of Year
Accounts receivable	$59,400	$53,900
Inventory	66,000	72,600
Prepaid insurance	8,800	7,700
Accounts payable	24,200	19,800
Wages payable	9,900	12,100

Calculate the net cash flow from operating activities using the direct method. Show a related cash flow for each revenue and expense.

Cash Flows from Operating Activities (Direct Method)
Cash Received from Customers		Answer Correct Mark 1.00 out of 1.00
Cash Paid for Merchandise Purchased	Answer Correct Mark 1.00 out of 1.00
Cash Paid to Employees	Answer Correct Mark 1.00 out of 1.00
Cash Paid for Rent	Answer Correct Mark 1.00 out of 1.00
Cash Paid for Insurance	Answer Correct Mark 1.00 out of 1.00	Answer Incorrect Mark 0.00 out of 1.00
Net Cash Provided by Operating Activities		Answer Correct Mark 1.00 out of 1.00

Compute its operating cash flow to current liabilities (OCFCL) ratio. (Assume current liabilities consist of accounts payable and wages payable.)

Round answer to two decimal places. Answer