Exercise 23-3
The income statement of Pharoah Company is shownbelow.
PHAROAH COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017
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).)
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).)
Related questions
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.
Selected information taken from the financial statements of Ford star Co. for the year ended December 31, 2019, follows:
| Net cash provided by operations | $ | 39,000 |
| Cost of goods sold | 170,300 | |
| Selling, general, and administrative expenses | 58,500 | |
| Accounts payable | 46,800 | |
| Dividends paid | 81,900 | |
| Research and development expenses | 35,100 | |
| Merchandise inventory | 57,200 | |
| Provision for income taxes | 22,100 | |
| Net sales | 477,100 | |
| Interest expense | 53,300 | |
Required:
a. Calculate income from operations (operating income) for the year ended December 31, 2019.
b. Calculate net income for the year ended December 31, 2019.
