Question

Crane Corporation had the following 2020 income statement. Sales revenue $197,000 Cost of goods sold 124,000 Gross profit 73,000 Operating expenses (includes depreciation of $19,000) 48,000 Net income $25,000 The following accounts increased during 2020: Accounts Receivable $10,000, Inventory $10,000, and Accounts Payable $11,000. Prepare the cash flows from operating activities section of Crane’s 2020 statement of cash flows using the direct method.

Answer 1

$35,000

Step-by-step explanation:

Crane Corporation

CASH FLOW STATEMENT

FOR THE YEAR ENDING 2020

Cash Flows from Operating Activities:

Net Income $25,000

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation on Fixed Assets $19,000

(Increase) Decrease in Current Assets:

Accounts Receivable ($10,000)

Inventory ($10,000)

Increase (Decrease) in Current Liabilities:

Accounts Payable $11,000

Net Cash Provided by operating activities $35,000

Cash Flow from Investing Activities: -

Cash Flow from Financing Activities: -

Net Increase (Decrease) in Cash $35,000