The income statement of Cheyenne Company is shown below. CHEYENNE COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,890,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000 Gross profit 2,190,000 Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000 Net income $1,030,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $90,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.
The income statement of Cheyenne Company is shown below. CHEYENNE COMPANYINCOME STATEMENTFOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue $6,890,000 Cost of goods sold Beginning inventory $1,910,000 Purchases 4,410,000 Goods available for sale 6,320,000 Ending inventory 1,620,000 Cost of goods sold 4,700,000 Gross profit 2,190,000 Operating expenses Selling expenses 460,000 Administrative expenses 700,000 1,160,000 Net income $1,030,000 Additional information: 1. Accounts receivable decreased $350,000 during the year. 2. Prepaid expenses increased $160,000 during the year. 3. Accounts payable to suppliers of merchandise decreased $300,000 during the year. 4. Accrued expenses payable decreased $90,000 during the year. 5. Administrative expenses include depreciation expense of $50,000. Prepare the operating activities section of the statement of cash flows using the direct method.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter5: Inventories And Cost Of Goods Sold
Section: Chapter Questions
Problem 5.8MCP
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Question
The income statement of Cheyenne Company is shown below.
CHEYENNE COMPANY
INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 |
||||
---|---|---|---|---|
Sales revenue
|
$6,890,000
|
|||
Cost of goods sold
|
||||
Beginning inventory
|
$1,910,000
|
|||
Purchases
|
4,410,000
|
|||
Goods available for sale
|
6,320,000
|
|||
Ending inventory
|
1,620,000
|
|||
Cost of goods sold
|
4,700,000
|
|||
Gross profit
|
2,190,000
|
|||
Operating expenses
|
||||
Selling expenses
|
460,000
|
|||
Administrative expenses
|
700,000
|
1,160,000
|
||
Net income
|
$1,030,000
|
Additional information:
1. | ||
2. | Prepaid expenses increased $160,000 during the year. | |
3. | Accounts payable to suppliers of merchandise decreased $300,000 during the year. | |
4. | Accrued expenses payable decreased $90,000 during the year. | |
5. | Administrative expenses include |
Prepare the operating activities section of the statement of cash flows using the direct method.
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