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An income statement for the first year of operations for Patti Company appears below: Sales $ 390,000 Dividend revenue 39,000 Interest revenue 24,050 Cost...

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Finance

An income statement for the first year of operations for PattiCompany appears below:

Sales$390,000
Dividend revenue39,000
Interest revenue24,050
Cost of goods sold(208,000)
Salary expense(26,000)
Depreciation expense(70,200)
Income tax expense(109,200)
Net income$39,650

Additional information:

  1. Accounts payable, end of year, $13,000.

  2. Salaries payable, end of year, $8,450.

  3. Inventories, end of year, $26,000.

  4. Accounts receivable, end of year, $32,500.

Required:

Use the direct approach to calculate the cash provided (used) byoperating activities for Patti Company. (Net cash outflowsand amounts to be deducted should be indicated by a minussign.)

Answer & Explanation Solved by verified expert
3.6 Ratings (319 Votes)
Under direct approach cash actually paid or received is calculated note 1 Cash received from sales will be Sales Balance of accounts receivable 39000032500 357500 2    See Answer
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Transcribed Image Text

An income statement for the first year of operations for PattiCompany appears below:Sales$390,000Dividend revenue39,000Interest revenue24,050Cost of goods sold(208,000)Salary expense(26,000)Depreciation expense(70,200)Income tax expense(109,200)Net income$39,650Additional information:Accounts payable, end of year, $13,000.Salaries payable, end of year, $8,450.Inventories, end of year, $26,000.Accounts receivable, end of year, $32,500.Required:Use the direct approach to calculate the cash provided (used) byoperating activities for Patti Company. (Net cash outflowsand amounts to be deducted should be indicated by a minussign.)

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