MESSAG Problem 173A The income statement of Whitlock Company

MESSAG Problem 17-3A The income statement of Whitlock Company is presented here. WHITLOCK COMPANY Income Statement For the Year Ended November 30, 2017 Sales revenue $7,445,200 Cost of goods sold Beginning inventory Purchases Goods available for sale Ending inventory $1,902,700 4,414,000 6,316,700 1,330,700 Total cost of goods sold Gross profit Operating expenses Net income 4,986,000 2,459,200 1,196,200 $1,263,000 Additional information 1. Accounts receivable increased $190,000 during the year, and inventory decreased $572, 2. Prepaid expenses increased $169,900 during the year. 3. A 4. Accrued expenses payable decreased $106,900 during the year 5. Operating expenses include depreciation expense of $97,800. ccounts payable to suppliers of merchandise decreased $342,700 during the year.

Solution

WHITLOCK COMPANY Partial Statement of Cash Flows Cash Flow from operating activities Net Income $ 1,263,000 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense $ 97,800 Decrease in inventory $   572,000 Decrease in accrued expense payable $ (106,900) Increase in prepaid expenses $ (169,900) Increase in accounts receivable $ (190,000) Decrease in accounts payable $ (342,700) $   (139,700) Net Cash provided by operating activities $ 1,123,300