Question

et sales $ 1,825,000 Expenses: Cost of goods sold $ 1,060,000 Operating expenses 570,000 Depreciation expense 51,000 Income tax expense 41,000 Total expenses 1,722,000 Net income $ 103,000 PEACH COMPUTER Selected Balance Sheet Data December 31 2021 2020 Increase (I) or Decrease (D) Cash $ 103,000 $ 85,500 $ 17,500 (I) Accounts receivable 45,100 49,500 4,400 (D) Inventory 76,000 55,500 20,500 (I) Prepaid rent 3,100 5,200 2,100 (D) Accounts payable 46,000 37,500 8,500 (I) Income tax payable 5,100 10,500 5,400 (D) Required: Prepare the operating activities section of the

Answer 1

PEACH COMPUTER

PEACH COMPUTER

Statement of Cash Flows for the year ended December 31, 2021

(Operating Activities only)

Net income $ 103,000

Depreciation expense 51,000

Changes in working capital:

Accounts receivable 4,400

Inventory -20,500

Prepaid rent 2,100

Accounts payable 8,500

Income tax payable -5,400

Net cash flows from

operating activities $143,100

Step-by-step explanation:

a) Data and Calculations:

Sales revenue $1,825,000

Expenses: Cost of goods sold $ 1,060,000

Operating expenses 570,000

Depreciation expense 51,000

Income tax expense 41,000

Total expenses 1,722,000

Net income $ 103,000

PEACH COMPUTER

Selected Balance Sheet Data

December 31 2021 2020

2021 2020 Increase (I) or Decrease (D)

Cash $ 103,000 $ 85,500 $ 17,500 (I)

Accounts receivable 45,100 49,500 4,400 (D)

Inventory 76,000 55,500 20,500 (I)

Prepaid rent 3,100 5,200 2,100 (D)

Accounts payable 46,000 37,500 8,500 (I)

Income tax payable 5,100 10,500 5,400 (D)