Computation of operating cash flows The financial statements of Custom Corporation provide the following information for the current year: Using this information, compute for the current year:
What will be an ideal response?
a) Cash received from customers: $801,000 (net sales) + $20,000 (decrease in accounts receivable) = $821,000
(b) Cash payments for purchases of merchandise: $465,000 (costs of goods sold) + $16,000 (increase in inventory) - $7,000 (increase in accounts payable) = $474,000
(c) Cash payments for operating expenses: $300,000 (operating expenses) - $40,000 (non-cash expenses) + $2,500 (increase in prepayments) + $7,700 (decrease in accrued liabilities) = $270,200
(d) Income taxes paid: $39,000 (income tax expense) + $2,900 (decrease in accrued income taxes payable) = $41,900
You might also like to view...
The concept of materiality as it applies to a financial statement audit
A) Relates primarily to the audit fees involved. B) Generally involves less professional judgment for public companies. C) Is determined, in part, based on how financial statement users may be influenced in making decisions. D) Relates primarily to the quantity of audit procedures performed.
Such objects as clothing are more important nonverbal communicators within one's culture than between cultures
Indicate whether the statement is true or false.