Complete Question:
PEACH COMPUTER Income Statement For the year ended December 31, 2021 Net nales $1,725,000 Expenses: Cost of goods sold $1,020,000 Operating expenses 530,000 Depreciation expense 47,000 Income tax expense 37,000 Total expenses 1,634,000 Net Income $ 91,000 PEACH COMPUTER Selected Balance sheet Data December 31 Cash Accounts receivable Inventory Prepaid rent Accounts payable Income tax payable 2021 $99,000 46,300 72,000 2,700 42,000 4,700 2020 $83,500 50,500 53,500 4,400 35,500 8,500 Increase (1) or Decrease (D) $15,500 (1) 4,200 (D) 18,500 (1) 1,700 (D) 6,500 (I) 3,800 (D)
Required: Prepare the operating activities section of the statement of cash flows for Peach Computer using the indirect method.
Answer:
Peach Computer
Statement of Cash Flows
For the year ended December 31, 2021
Operating Activities:
Operating income $490,000
Accounts receivable 4,200
Inventory (18,500)
Prepaid rent 1,700
Accounts payable 6,500
Income tax payable (3,800)
Net operating cash $480,100
Step-by-step explanation:
a) Data and Calculations:
PEACH COMPUTER
Income Statement
For the year ended December 31, 2021
Net nales $1,725,000
Expenses:
Cost of goods sold $1,020,000
Operating expenses 530,000
Operating income $490,000
Depreciation expense 47,000
Income tax expense 37,000
Total expenses 1,634,000
Net Income $ 91,000
PEACH COMPUTER
Selected Balance sheet Data
December 31, 2021 2020 Increase (1) or Decrease (D)
Cash $99,000 $83,500 $15,500 (1)
Accounts receivable 46,300 50,500 4,200 (D)
Inventory 72,000 53,500 18,500 (1)
Prepaid rent 2,700 4,400 1,700 (D)
Accounts payable 42,000 35,500 6,500 (I)
Income tax payable 4,700 8,500 3,800 (D)