Problem 15-25

Clover Company had the following information for the years 20X1 and 20X0:

Clover Company
Income Statement
For the Year Ended December 31, 20X1
Sales			4,200,000
Cost of goods sold			2,150,000
Gross profit			2,050,000
Operating expense:
Selling expense	580,000
Administrative expense	440,000
Depreciation expense	40,000		1,060,000
Net income			990,000

Clover Company
Balance Sheet
December 31, 20X1
	20X1			20X0
Assets
Cash	16,000			22,000
Accounts receivable	325,000			412,000
Inventory	127,000			205,000
Property, plant and equipment	300,000			300,000
Accumulated depreciation	120,000			100,000
Total assets	648,000			839,000
Liabilities
Accounts payable	46,000			59,000
Accrued expenses	65,000			42,000
Stockholders' equity	537,000			738,000
Total liabilities and equity	648,000			839,000

Required:

Prepare the operating activities section of the statement of cash flows using the direct method.

Clover Company
Statement of Cash Flows
For the Year Ended December 31, 20X1
Cash flows from operating activities:
Cash payments:
Net cash provided by operations