Annie Lennox Co. reports revenues of $193,720 and operating expenses of $111,020

Question

Annie Lennox Co. reports revenues of $193,720 and operating expenses of $111,020 in its first year of operations, 2014. Accounts receivable and accounts payable at year-end were $80,730 and $36,710, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.

Using the direct method, compute net cash provided (used) by operating activities. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Net cash provides by operating activities $______________

Explanation / Answer

Cash Flow from Operations Cash Receipts from customers (Revenue - Accounts Receivable) 193720-80730          1,12,990 Cash paid to suppliers (Operating Expenses - Accounts Payable) 111020-36710 (74,310) Net Cash provided by Operations 38,680

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