Question
Following is an income statement for the Speedway Corporation for the year ended December 31, 2020, and a schedule listing the companys current assets and
Following is an income statement for the Speedway Corporation for the year ended December 31, 2020, and a schedule listing the companys current assets and current liabilities at the end of 2019 and 2020.
Speedway Corporation Income Statement For the Year Ended December 31, 2020 | |||||||
---|---|---|---|---|---|---|---|
Sales | $77,100 | ||||||
Cost of goods sold | (43,947 | ) | |||||
Gross margin | 33,153 | ||||||
Operating expenses: | |||||||
Selling and general expenses | $8,481 | ||||||
Depreciation expense | 2,313 | (10,794 | ) | ||||
Operating income | 22,359 | ||||||
Gain on sale of land held as investment | 5,631 |
| |||||
Income before income tax | 27,990 | ||||||
Income tax expense | (5,598 | ) | |||||
Net income | $22,392 |
|
2019 | 2020 | ||||||
---|---|---|---|---|---|---|---|
Cash | $12,300 | $4,300 | |||||
Accounts receivable | 4,210 | 9,950 | |||||
Inventory | 6,720 | 11,720 | |||||
Prepaid selling/general expenses | 3,500 | 800 | |||||
Accounts payable | 2,520 | 5,166 | |||||
Accrued liabilities | 1,700 | 2,939 |
Prepare a schedule documenting the Speedway Corporations net cash flow from operating activities for the year ended December 31, 2020, using the indirect method. (Enter amounts that decrease cash flow either with a negative sign preceding the number, e.g. -15,000 or parenthesis e.g. (15,000).)
Prepare a schedule documenting the Speedway Corporations net cash flow from operating activities for the year ended December 31, 2020, using the direct method. Assume that selling and general expenses are related to both prepaid expenses and accrued liabilities. (Enter amounts that decrease cash flow either with a negative sign preceding the number, e.g. -15,000 or parenthesis e.g. (15,000).)
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