Whitlock Company Income Statement For the Year Ended November 30, 2015 Sales Rev
ID: 2474294 • Letter: W
Question
Whitlock Company
Income Statement
For the Year Ended November 30, 2015
Sales Revenue $7,700,000
Cost of good sold
Beginning Inventory $1,900,000
Purchases $4,400,000
Goods available for sale $6,300,000
Ending inventory $1,400,000
Total Cost of Goods Sold $4,900,000
Gross Profit $2,800,000
Operating Expenses $1,150,000
Net Income $1,650,000
Additional information:
Accounts receivable increased $200,000 during the year, and inventory decreased $500,000.
Prepaid expenses increased $150,000 during the year.
Accounts payable to suppliers of merchandise decreased $340,000 during the year.
Accrued expenses payable decreased $100,000 during the year.
Operating expenses include depreciation expense of $70,000.
Instructions
Prepare the operating activities section of the statement of cash ows for the year ended November 30, 2015, for Whitlock Company, using the indirect method.
Explanation / Answer
Net Income $16,50,000 Add: Depreciation $70,000 Less: Increase in accounts receivable -$2,00,000 Add: Inventory decreased $5,00,000 Less: Prepaid expenses increased -$1,50,000 Less: Accounts Payable decrease -$3,40,000 Less: Accrued expenses decrease -$1,00,000 Cash flow from Operating Activities $14,30,000
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