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The income statement for the Mendelin Corporation is as follows: $ 380,000 Revenues Less: Cost of goods sold: Beginning inventory50,000 Purchases 200,000 Ending inventory Less:
The income statement for the Mendelin Corporation is as follows: $ 380,000 Revenues Less: Cost of goods sold: Beginning inventory50,000 Purchases 200,000 Ending inventory Less: Patent amortization Advertising Depreciation expense Wages expense Insurance expense Bad debt expense Interest expense Net income (34,000) (216,000) (20,000) (12,000) (60,000) (30,000) (10,500) (6,400) (7,600) $17,500 Additional information is as follows: A. Interest expense includes $1,800 of discount amortization. B. The prepaid insurance expense account decreased by $2,000 during the year C. Wages payable decreased by $3,000 during the year. D. Accounts payable increased by $7,500 (this account is for purchase of merchandise only) E. Accounts receivable increased by $10,000 (net of allowance for doubtful accounts) F. Inventory decreased by $16,000. Required: Prepare a schedule of operating cash flows 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 Decrease in accounts payable Decrease in accounts receivable Decrease in inventory Decrease in prepaid insurance Decrease in wages payable Depreciation expense Discount amortization Increase in accounts payable Increase in accounts receivable Increase in inventory Increase in prepaid insurance Increase in wages payable Net cash from operating activities Net income Net loss Patent amortization Operating Cash Flows Indirect Method Prepare a schedule of operating cash flows 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.) Mendelin Corporation Operating Cash Flows Using the Indirect Method 1 Cash flows from operating activities: Add (deduct) adjusting items: 3 10 12
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