ADMS 2500 Chapter Notes - Chapter 5: Income Statement, Inventory Turnover, Balance Sheet
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1 Nov 2014
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The income statement of Vince Gill Company is shown below.
Vince Gill Company | ||
Income Statement | ||
For year ended December 31, 2014 | ||
Sales Revenue | $6,947,090 | |
Cost of Goods Sold | ||
Beginning inventory | $1,890,710 | |
Purchases | 4,323,810 | |
Goods available for sale | 6,214,520 | |
Ending inventory | 1,601,450 | |
Cost of goods sold | 4,613,070 | |
Gross Profit | 2,334,020 | |
Operating expenses | ||
Selling expenses | 446,970 | |
Admin expenses | 709,920 | 1,156,890 |
Net income | 1,177,130 | |
1. | Accounts receivable decreased $316,040 during the year. | |
2. | Prepaid expenses increased $175,400 during the year. | |
3. | Accounts payable to suppliers of merchandise decreased $283,580during the year. | |
4. | Accrued expenses payable decreased $115,830 during theyear. | |
5. | Administrative expenses include depreciation expense of$54,760. |
Prepare the operating activities section of the statement ofcash flows using the direct method.
Exercise 23-3
The income statement of Pharoah Company is shownbelow.
PHAROAH COMPANY | ||||
Sales revenue | $7,430,000 | |||
Cost of goods sold | ||||
Beginning inventory | $2,090,000 | |||
Purchases | 4,770,000 | |||
Goods available for sale | 6,860,000 | |||
Ending inventory | 1,440,000 | |||
Cost of goods sold | 5,420,000 | |||
Gross profit | 2,010,000 | |||
Operating expenses | ||||
Selling expenses | 440,000 | |||
Administrative expenses | 690,000 | 1,130,000 | ||
Net income | $880,000 |
Additional information:
1. | Accounts receivable decreased $350,000 during the year. | |
2. | Prepaid expenses increased $150,000 during the year. | |
3. | Accounts payable to suppliers of merchandise decreased $260,000during the year. | |
4. | Accrued expenses payable decreased $130,000 during theyear. | |
5. | Administrative expenses include depreciation expense of$60,000. |
Prepare the operating activities section of the statement of cashflows for the year ended December 31, 2017, for Pharoah Company,using the indirect method. (Show amounts that decreasecash flow with either a - sign e.g. -15,000 or in parenthesis e.g.(15,000).)