The following account information is available for Park Company for 2004.
Account Title Beginning of year End of Year
Accounts Receivable $26,000 $24,000
Merchandise Inventory 52,000 56,000
Prepaid Insurance 24,000 20,000
Accounts Payable (Inventory) 20,000 23,000
Salaries Payable 4,200 4,600
1. Sales for the period was 180,000
2. Purchases of merchandise for the period were $90,000.
3. Insurance expense for the period was $42,000.
4. Other operating expenses (all cash) were $30,000.
5. Salary expense was $35,000.
a. Compute the net cash flow from operating activities.
b. Prepare the cash flow from operating activities section of the statement of cash flows.
The solution computes the net cash flow from operating activities and prepares the cash flow from operating activities section of the statement of cash flows.