The income statement of Pina Company is shown below.PINA COMPANYINCOMESTATEMENTFOR THE YEAR ENDED DECEMBER 31, 2020Sales revenue$6,880,000Cost of goods soldBeginning inventory$1,880,000Purchases4,440.000Goods available for sale6,320,000Ending inventoryCost of goods sold1,620,0004,700,000Gross profit2,180,000Operating expensesSelling expensesAdministrative expenses460,000700,0001,160,000Net income$1,020,000Additional information:1.Accounts receivable decreased $380,000 during the year.Prepaid expenses increased $150,000 during the year.Accounts payable to suppliers of merchandise decreased $250,000 during the year.2.3.4.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.PINA COMPANYStatement of Cash Flows (Partial)24>

Cash receipts=Sale+Decrease in receivables=$6,880,000+$380,000=$7,260,000

The income statement of Pina Company is shown below. PINA COMPANY INCOMESTATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue Cost of goods sold Beginning inventory $6.880,000 $1.880,000 Purchases 4,440,000 6,320,000 Goods available for sale Ending inventory Cost of goods sold 1.620,000 4,700,000 Gross profit 2,180,000 Operating expenses Selling expenses Administrative expenses 460,000 700,000 1,160,000 $1.020.000 Net income Additional information: Accounts receivable decreased $380,000 during the year. 2 Prepaid expenses increased $150,000 during the year. Accounts payable to suppliers of merchandise decreased $250,000 during the year. Accrued expenses payable decreased $90,.000 during the year. Administrative expenses include depreciation expense of $50,000. 1. 3. 4. 5. Prepare the operating activities section of the statement of cash flows using the direct method.

The income statement of Pina Company is shown below. PINA COMPANY INCOMESTATEMENT FOR THE YEAR ENDED DECEMBER 31, 2020 Sales revenue Cost of goods sold Beginning inventory $6.880,000 $1.880,000 Purchases 4,440,000 6,320,000 Goods available for sale Ending inventory Cost of goods sold 1.620,000 4,700,000 Gross profit 2,180,000 Operating expenses Selling expenses Administrative expenses 460,000 700,000 1,160,000 $1.020.000 Net income Additional information: Accounts receivable decreased $380,000 during the year. 2 Prepaid expenses increased $150,000 during the year. Accounts payable to suppliers of merchandise decreased $250,000 during the year. Accrued expenses payable decreased $90,.000 during the year. Administrative expenses include depreciation expense of $50,000. 1. 3. 4. 5. 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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