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P17-3A Elbert Company Problem

P17-3A

The income statement of Elbert Company is presented here:

Elbert Corporation
Income Statement
For the Year Ended November 30, 2010

Sales - $7,700,000
Cost of Goods 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:
1). Accounts receivable increased $250,000 during the year, and inventory decreased $500,000.
2). Prepaid expenses increased $150,000 during the year.
3). Accounts payable to suppliers of merchandise decreased $340,000 during the year.
4). Accrued expenses payable decreased $100,000 during the year.
5). Administrative expenses include depreciation expense of $90,000.

Instructions:
Complete the operating activities section of the statement of cash flows for the year ended November 30, 2010, for Elbert Company, using the indirect method.

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Solution Summary

P17-3A

The income statement of Elbert Company is presented here:

Elbert Corporation
Income Statement
For the Year Ended November 30, 2010

Sales - $7,700,000
Cost of Goods 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:
1). Accounts receivable increased $250,000 during the year, and inventory decreased $500,000.
2). Prepaid expenses increased $150,000 during the year.
3). Accounts payable to suppliers of merchandise decreased $340,000 during the year.
4). Accrued expenses payable decreased $100,000 during the year.
5). Administrative expenses include depreciation expense of $90,000.

Instructions:
Complete the operating activities section of the statement of cash flows for the year ended November 30, 2010, for Elbert Company, using the indirect method.

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