Reconciling Net Income and Cash Flow from Operations For the fiscal year just completed, Dollar Sine Enterprises had the following summary information available concerning operating activities. The company had no investing or financing activities this year.
|
Sales of merchandise to customers on credit |
$307,400 |
|
Sales of merchandise to customers for cash |
88,250 |
|
Cost of merchandise sold on credit |
200,000 |
|
Cost of merchandise sold for cash |
57,400 |
|
Purchases of merchandise from suppliers on credit |
233,700 |
|
Purchases of merchandise from suppliers for cash |
48,100 |
|
Collections from customers on accounts receivable |
321,000 |
|
Cash payments to suppliers on accounts payable |
293,600 |
|
Operating expenses (all paid in cash) |
93,500 |
Required
A. Determine the amount of:
1. net income for the year.
2. cash flow from operations for the year (direct format).
B. Indicate the direction and amounts by which each of these accounts changed during the year.
1. Accounts receivable
2. Merchandise inventory
3. Accounts payable
C. Using your results above, prepare the operating activities section of the statement of cash flows (indirect format).