Cash Flows from Operating Activities—Direct Method The income statement of Kodia

Question

Cash Flows from Operating Activities—Direct Method

The income statement of Kodiak Industries Inc. for the current year ended June 30 is as follows:

Changes in the balances of selected accounts from the beginning to the end of the current year are as follows:

Income tax payable

Sales $349,010 Cost of merchandise sold 198,170 Gross profit $150,840 Operating expenses: Depreciation expense $26,780 Other operating expenses 70,800 Total operating expenses 97,580 Income before income tax $53,260 Income tax expense 14,780 Net income $38,480 Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash out flows, cash payments, and decreases in cash. Kodiak Industries Inc. Cash Flows from Operating Activities Section For the year ended on June 30 Cash flows from operating activitie Cash received from customers 356740 Deduct cash payments for mer Deduct cash payments for ope Deduct cash payments for incc Net cash flow from operating activities

Explanation / Answer

Answer

Kodiak Industries Inc Cash flows from operating Activities Section For the year ended June 30 Sales $349,010 Add Decrease in Accounts receivable 7730 Cash received from customers $356,740 Cost of merchandise $198,170 Add: Increase In Inventories 2,690 Decrease in Accounts Payable              5,500 Cash Payments from Merchandise $206,360 Other operating expenses            70,800 Add:- Decerase in prepaid expenses              2,580 Less: Increase in acrrued expenses                (770) Cash payments for operating expenses $        72,610 Income tax expense            14,780 Add:- Decrease in Tax paybel              1,850 Cash payments for income taxes $        16,630 Net cash flow from operating activities $        61,140

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