Question
The income statement for Pharoah Ltd., a private company following ASPE, is presented here: PHAROAH LTD. Income Statement Year Ended November 30, 2018 Sales $8,200,000
The income statement for Pharoah Ltd., a private company following ASPE, is presented here:
| PHAROAH LTD. Income Statement Year Ended November 30, 2018 | |||
| Sales | $8,200,000 | ||
| Cost of goods sold | 4,450,000 | ||
| Gross profit | 3,750,000 | ||
| Operating expenses | 2,030,000 | ||
| Income from operations | 1,720,000 | ||
| Interest expense | 115,000 | ||
| Income before income tax | 1,605,000 | ||
| Income tax expense | 370,000 | ||
| Net income | $1,235,000 | ||
Additional information:
| 1. | Operating expenses include $77,000 of depreciation expense and a $108,000 impairment loss on property, plant, and equipment. | ||
| 2. | Accounts receivable increased by $186,000. | ||
| 3. | Inventory decreased by $51,000. | ||
| 4. | Prepaid expenses related to operating expenses increased by $46,000. | ||
| 5. | Accounts payable to suppliers of merchandise decreased by $181,000. | ||
| 6. | Accrued liabilities related to operating expenses decreased by $95,000. | ||
| 7. | Interest payable decreased by $12,000. | ||
| 8. | Unearned revenue that was received from customers decreased by $16,000. | ||
| 9. | Income tax payable increased by $29,000.
Prepare the operating activities section of the statement of cash flows, using the indirect method. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Medical Audit In Primary Health Care
Authors: Martin Lawrence, Theo Schofield
1st Edition
0192622676, 978-0192622679
