Question
Presented below is the income statement of Jack, Inc.: Sales $380,000 Cost of goods sold 225,000 Gross profit $155,000 Operating expenses 85,000 Income before income
Presented below is the income statement of Jack, Inc.:
Sales $380,000
Cost of goods sold 225,000
Gross profit $155,000
Operating expenses 85,000
Income before income taxes 70,000
Income taxes 28,000
Net income $ 42,000
In addition, the following information related to net changes in working capital is presented: . Debit Credit
Cash.........................................................................................................................D/$12,000
Accounts receivable................................................................................................D/25,000
Inventories ......................................................................................................................................C/$19,400
Salaries payable (operating expenses)....................................................................D/6,000
Accounts payable.............................................................................................................................C/14,000
Income taxes payable...............................................................................................D/4,000
The company also indicates that depreciation expense for the year was $16,700 and that the deferred tax liability account increased $2,600.
Instruction: Prepare a schedule computing the net cash flow from operating activities that would be shown on a statement of cash flows using the DIRECT METHOD:
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