The income statement for Piura Merchandising Corporation is as follows:

Piura Merchandising Corporation

Income Statement

For the Year Ended December $31,20$X$1$

Sales $ $1,480,000$

Cost of goods sold

Beginning inventory $ $425,000$

Purchases $770,000$

Ending inventory $(260,000)$

$(935,000)$

Depreciation expense $(66,000)$

Amortization of patent $(20,000)$

Wages expense $(71,000)$

Insurance expense $(39,500)$

Income before taxes $ $348,500$

Income taxes $($all current$)(103,500)$

Net income $ $245,000$

Other information is as follows:

A$.$ Accounts payable decreased by $$19,000$ during the year.

B$.$ Accounts receivable increased by $$23,500.$

C$.$ All wages were paid at the beginning of the year; at the end of the year, wages payable had a balance of $$10,500.$

D$.$ Prepaid insurance increased by $$24,000$ during the year.

 

 Required:

Prepare a schedule that provides the operating cash flows for the year using the indirect method.

Refer to the list below for the exact wording of an amount description within your Statement of Cash Flows.

Amount Descriptions

Amortization of patent

Decrease in accounts payable

Decrease in accounts receivable

Decrease in inventory

Decrease in prepaid insurance

Decrease in wages payable

Depreciation expense

Increase in accounts payable

Increase in accounts receivable

Increase in inventory

Increase in prepaid insurance

Increase in wages payable

Less cost of goods sold

Net cash from operating activities

Net income

 

 Required:

Prepare a schedule that provides the operating cash flows for the year using the indirect method. $($Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.$)$

Piura Merchandising Corporation

Operating Cash Flows Using the Indirect Method

$1$

Cash flows from operating activities:

$2$

$3$

Add $($deduct$)$ adjusting items:

$4$

$5$

$6$

$7$

$8$

$9$

$10$