aEx. 186
The general ledger of Lopez Company provides the following information:
End of YearBeginning of Year
Accounts Receivable$ 55,000$ 94,000
Inventory310,000210,000
Accounts Payable40,00065,000
The company's net sales for the year was $2,200,000 and cost of goods sold amounted to $1,500,000.
Instructions
Compute the following:
(a)Cash receipts from customers.
(b)Cash payments to suppliers.
aEx. 187
The income statement of Redman Inc. for the year ended December 31, 2011, reported the following condensed information:
Service revenue$600,000
Operating expenses 360,000
Income from operations240,000
Income tax expense 60,000
Net income$180,000
Redman's balance sheet contained the following comparative data at December 31:
2011 2010
Accounts receivable$60,000$40,000
Accounts payable40,00050,000
Income taxes payable6,0003,000
Redman has no depreciable assets. Accounts payable pertains to operating expenses.
Instructions
Prepare the operating activities section of the statement of cash flows using the direct method.
aEx. 188
The income statement of Falcone Company is shown below:
FALCONE COMPANY
Income Statement
For the Year Ended December 31, 2011
Sales$8,000,000
Cost of goods sold 5,400,000
Gross profit2,600,000
Operating expenses
Selling expenses$500,000
Administrative expense700,000
Depreciation expense90,000
Amortization expense 30,000 1,320,000
Net income$1,280,000
Additional information:
1.Accounts receivable increased $400,000 during the year.
2.Inventory increased $250,000 during the year.
3.Prepaid expenses increased $200,000 during the year.
4.Accounts payable to merchandise suppliers increased $100,000 during the year.
5.Accrued expenses payable increased $160,000 during the year.
Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2011, for Falcone Company, using the direct method.