The income statement of Asquith Company is presented on the next page. Additional information:
1. Accounts receivable decreased $320,000 during the year, and inventory increased $120,000.
2. Prepaid expenses increased $175,000 during the year.
3. Accounts payable to merchandise suppliers increased $50,000 during the year.
4. Accrued expenses payable increased $155,000 during the year.
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ASQUITH COMPANY |
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Income Statement |
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For the Year Ended December 31, 2012 |
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Sales revenue |
$5,400,000 |
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Cost of goods sold |
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Beginning inventory |
$1,780,000 |
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Purchases |
3,430,000 |
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Goods available for sale |
5,210,000 |
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Ending inventory |
1,900,000 |
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Total cost of goods sold |
3,310,000 |
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Gross profit |
2,090,000 |
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Operating expenses |
105,000 |
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Depreciation expense |
20,000 |
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Amortization expense |
945,000 |
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Other expenses |
1,070,000 |
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Net income |
$1,020,000 |
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Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2012, for Asquith Company, using the indirect method.