Cash Flows from Operating Activities—Direct Method The income statement for Rhino Company for the current year ended June 30 and balances of selected accounts at the beginning and the end of the year are as follows: Sales $445,500 Cost of merchandise sold 154,000 Gross profit $291,500 Operating expenses: Depreciation expense $38,500 Other operating expenses 115,280 Total operating expenses 153,780 Income before income tax $137,720 Income tax expense 39,600 Net income $98,120 End of Year Beginning of Year Accounts receivable (net) $36,300 $31,240 Inventories 92,400 80,300 Prepaid expenses 14,520 15,840 Accounts payable (merchandise creditors) 67,540 62,700 Accrued expenses payable (operating expenses) 19,140 20,900 Income tax payable 4,400 4,400 Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Rhino Company Cash Flows from Operating Activities Section For the year ended on June 30 Cash flows from operating activities: Cash received from customers $ Cash payments for merchandise Cash payments for operating expenses Cash payments for income taxes Net cash flow from operating activities

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Cash Flows from Operating Activities—Direct Method

The income statement for Rhino Company for the current year ended June 30 and balances of selected accounts at the beginning and the end of the year are as follows:

Sales			$445,500
Cost of merchandise sold			154,000
Gross profit			$291,500
Operating expenses:
	Depreciation expense	$38,500
	Other operating expenses	115,280
		Total operating expenses		153,780
Income before income tax			$137,720
Income tax expense			39,600
Net income			$98,120

	End of Year	Beginning of Year
Accounts receivable (net)	$36,300		$31,240
Inventories	92,400		80,300
Prepaid expenses	14,520		15,840
Accounts payable (merchandise creditors)	67,540		62,700
Accrued expenses payable (operating expenses)	19,140		20,900
Income tax payable	4,400		4,400

Prepare the Cash Flows from Operating Activities section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.

Rhino Company
Cash Flows from Operating Activities Section
For the year ended on June 30
Cash flows from operating activities:
Cash received from customers	$
Cash payments for merchandise
Cash payments for operating expenses
Cash payments for income taxes
Net cash flow from operating activities

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