Present below are two independent situations.

Situation A:

Chenowith Co. reports revenue of $194,340 and operating expenses of $112,340 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $78,680 and $40,480, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.


Using the direct method, compute net cash provided (used) by operating activities. (If an amount reduces the account balance then enter with negative sign.)

Situation B:

The income statement for Edgebrook Company shows cost of goods sold $305,400 and operating expenses (exclusive of depreciation) $227,830. The comparative balance sheet for the year shows that inventory increased $21,810, prepaid expenses decreased $7,650, accounts payable (related to merchandise) decreased $15,190, and accrued expenses payable increased $13,590.


Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.