Last year, SOS a service company had sales of $820,000
and collected $700,000 cash from its sales; its customers still owed SOS $120,000 at the end of the year. Total Operating Expenses for the year were $620,000 including $90,000 of Depreciation Expense. All expenses, except depreciation was paid in cash.
Please ignore the income tax ramifications.
a) Prepare an Income Statement
b) Prepare a Statement of Cash Provided by Operating
Activities using the Direct Method.
Less Expenses ($620,000)
The income statement ignoring income tax ramifications are discussed. The statement of cash provided by operating is prepared.