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The income statement of Carla Company is shown below. Carla Company Income Statement For the Year Ended December 31, 2025 Sales revenue $7,430,000 Cost
The income statement of Carla Company is shown below. Carla Company Income Statement For the Year Ended December 31, 2025 Sales revenue $7,430,000 Cost of goods sold Beginning inventory $2,090,000 Purchases 4,770,000 Goods available for sale 6,860,000 Ending inventory 1,440,000 Cost of goods sold 5,420,000 Gross profit 2,010,000 Operating expenses Selling expenses 440,000 Administrative expenses 690,000 1,130,000 Selling expenses 440,000 Administrative expenses 690,000 1,130,000 Net income $880,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $150,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $260,000 during the year. 4. Accrued expenses payable decreased $130,000 during the year. 5. Administrative expenses include depreciation expense of $60,000. Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2025, for Carla Company, using the indirect method. (Show amounts that decrease cash flow with either a-sign eg.-15,000 or in parenthesis e.g. (15,000).) CARLA COMPANY Partial Statement of Cash Flows For the Year Ended December 31, 2025 Cash Flows from Operating Activities Net Income Adjustments to reconcile net income to Adjustments to reconcile net income to Decrease in Accounts Payable
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