The income statement of Vince Gill Company is shown below. (3,4)
VINCE GILL COMPANY
FOR THE YEAR ENDED DECEMBER 31, 2008
Cost of goods sold
Beginning inventory $1,900,000
Goods available for sale 6,300,000
Ending inventory 1,600,000
Cost of goods sold 4,700,000
Gross profit 2,200,000
Selling expenses 450,000
Administrative expenses 700,000
Net income $1,050,000
1. Accounts receivable decreased $360,000 during the year.
2. Prepaid expenses increased $170,000 during the year.
3. Accounts payable to suppliers of merchandise decreased $275,000 during the year.
4. Accrued expenses payable decreased $100,000 during the year.
5. Administrative expenses include depreciation expense of $60,000.
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2008, for Vince Gill Company, using the indirect method.© BrainMass Inc. brainmass.com September 23, 2018, 5:48 pm ad1c9bdddf - https://brainmass.com/business/statement-of-cash-flows/prepare-operating-activities-cash-flows-indirect-339997
Please see the attached Excel 97-2003 spreadsheet.
Note that ...
Given an income statement and a summary of balance sheet account changes, this solution illustrates how to compute the company's cash flows from operating activities using the indirect method.