VINCE GILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014 Sales r

Question

VINCE GILL COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2014

Sales revenue $6,903,070 Cost of goods sold Beginning inventory $1,890,440 Purchases 4,486,970 Goods available for sale 6,377,410 Ending inventory 1,606,840 Cost of goods sold 4,770,570 Gross profit 2,132,500 Operating expenses Selling expenses 448,490 Administrative expenses 707,660 1,156,150 Net income $976,350 Additional information: 1. Accounts receivable decreased $310,820 during the year. 2. Prepaid expenses increased $165,850 during the year. 3. Accounts payable to suppliers of merchandise decreased $266,330 during the year. 4. Accrued expenses payable decreased $110,810 during the year. 5. Administrative expenses include depreciation expense of $63,460

. Prepare the operating activities section of the statement of cash flows using the direct method.

Explanation / Answer

Solution.

Cash Flow from Operating expenses:

Working Notes:

1) 6903070+310820

2) 4486970+1606840-1890440+266330

3)448490+707660-63460+165850+110810

Particulars Amount ($) Cash Receipts From Customers (1) 7213890 Cash Payments To Suppliers (2) 4469700 For Expenses (3) 1369350 Net Cash Flow from Operating Activities 1374840

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