The income statement of Country Kitchen Bakeries Inc. for the current year ended June 30 is as follows:
|
Sales |
|
$456,000 |
|
Cost of merchandise sold |
|
259,000 |
|
Gross profit |
|
$197,000 |
|
Operating expenses: |
|
|
|
Depreciation expense |
$35,000 |
|
|
Other operating expenses |
92,400 |
|
|
Total operating expenses |
|
127,400 |
|
Income before income tax |
|
$ 69,600 |
|
Income tax expense |
|
19,300 |
|
Net income |
|
$ 50,300 |
Changes in the balances of selected accounts from the beginning to the end of the current year are as follows:
|
|
Increase |
|
|
Decrease* |
|
Accounts receivable (net) |
$10,500* |
|
Inventories |
3,500 |
|
Prepaid expenses |
3,400* |
|
Accounts payable (merchandise creditors) |
7,200* |
|
Accrued expenses (operating expenses) |
1,100 |
|
Income tax payable |
2,400* |
Prepare the cash flows from operating activities section of the statement of cash flows, using the direct method.