Grouper Company’s income statement for the year ended December 31, 2017, contain
ID: 2583570 • Letter: G
Question
Grouper Company’s income statement for the year ended December 31, 2017, contained the following condensed information.
$836,000
$619,000
59,000
26,000
704,000
132,000
41,000
$91,000
Grouper’s balance sheet contained the following comparative data at December 31.
2017
2016
(Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cash flows using the direct method.
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Service revenue$836,000
Operating expenses (excluding depreciation)$619,000
Depreciation expense59,000
Loss on sale of equipment26,000
704,000
Income before income taxes132,000
Income tax expense41,000
Net income$91,000
Explanation / Answer
GROUPER COMPANY
Statement of Cash Flows (Partial)
Cash collected from Customers = Beginning Accounts Receivable + Service revenue - Ending Accounts Receivable
= 56,000 + 836,000 - 39,000
= 853,000
Payment for operating expenses = Beginning Accounts Payable + Operating expenses - Ending Accounts Payable
= 31,000 + 619,000 - 39,000
= 611,000
Payment for taxes = Beginning taxes payable + Income tax expenses - Ending taxes payable
= 8,000 + 41,000 - 4,100
= 44,900
Cash collected from customers 853,000 Payment for operating expenses (611,000) Payment for taxes (44,900) Cash flows from Operating activities 197,100Related Questions
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