2024 – The income statement of Rodriquez Company is shown below RODRIQUEZ COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31

2024 – The income statement of Rodriquez Company is shown below RODRIQUEZ COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31.

The income statement of Rodriquez Company is shown below.

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RODRIQUEZ COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012

Sales
$6,884,420

Cost of goods sold
Beginning inventory
$1,897,410

Purchases
4,478,260

Goods available for sale
6,375,670

Ending inventory
1,601,260

Cost of goods sold
4,774,410

Gross profit
2,110,010

Operating expenses
Selling expenses
448,740

Administrative expenses
695,660

1,144,400

Net income
$965,610

>additional information

Additional information:

1. Accounts receivable decreased $317,330 during the year.
2. Prepaid expenses increased $160,690 during the year.
3. Accounts payable to suppliers of merchandise decreased $281,450 during the year.
4. Accrued expenses payable decreased $127,540 during the year.
5. Administrative expenses include depreciation expense of $56,710.

Prepare the operating activities section of the statement of cash flows using the direct method.

Situation A:
Chenowith Co. reports revenues of $191,900 and operating expenses of $111,340 in its first year of operations, 2012. Accounts receivable and accounts payable at year-end were $82,360 and $37,200, respectively. Assume that the accounts payable related to operating expenses. Ignore income taxes.

Compute net cash provided

Using the direct method, compute net cash provided (used) by operating activities. (If an amount reduces the account balance then enter with negative sign.)

Net cash
providedused
by operating activities
$

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Situation B:
The income statement for Edgebrook Company shows cost of goods sold $310,820 and operating expenses (exclusive of depreciation) $227,710. The comparative balance sheet for the year shows that inventory increased $23,390, prepaid expenses decreased $8,240, accounts payable (related to merchandise) decreased $18,620, and accrued expenses payable increased $11,740.

Cash payments

Compute (a) cash payments to suppliers and (b) cash payments for operating expenses.

(a) Cash payments to suppliers
$

(b) Cash payments for operating expenses
$

Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.

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FAIRCHILD COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2012 AND 2011

2012

2011

Cash
$1,807

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$1,095

Receivables
1,750

1,294

Inventory
1,593

1,902

Plant assets
1,897

1,703

Accumulated depreciation
(1,203

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)

(1,169

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)

Long-term investments (held-to-maturity)
1,301

1,465

$7,145

$6,290

Accounts payable
$1,216

$791

Accrued liabilities
200

230

Bonds payable
1,406

1,649

Common stock
1,900

1,692

Retained earnings
2,423

1,928

$7,145

$6,290

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FAIRCHILD COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012

Sales
$6,812

Cost of goods sold
4,692

Gross margin
2,120

Selling and administrative expenses
920

Income from operations
1,200

Other revenues and gains
Gain on sale of investments
90

Income before tax
1,290

Income tax expense
531

Net income
$759

>additional information

Additional information:

During the year, $64 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $264.

Prepare a statement of cash flows using the indirect method. (If an amount reduces the account balance then enter with negative sign.)

Condensed financial data of Fairchild Company for 2012 and 2011 are presented below.

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FAIRCHILD COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2012 AND 2011

2012

2011

Cash
$1,805

$1,096

Receivables
1,742

1,299

Inventory
1,585

1,905

Plant assets
1,894

1,700

Accumulated depreciation
(1,206

<

)

(1,178

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)

Long-term investments (held-to-maturity)
1,294

1,469

$7,114

$6,291

Accounts payable
$1,209

$793

Accrued liabilities
210

236

Bonds payable
1,401

1,648

Common stock
1,891

1,703

Retained earnings
2,403

1,911

$7,114

$6,291

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FAIRCHILD COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2012

Sales
$6,854

Cost of goods sold
4,702

Gross margin
2,152

Selling and administrative expenses
939

Income from operations
1,213

Other revenues and gains
Gain on sale of investments
83

Income before tax
1,296

Income tax expense
534

Net income
$762

>additional information

Additional information:

During the year, $73 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $270.

Prepare a statement of cash flows using the direct method. (If an amount reduces the account balance then enter with negative sign.)