Question

The income statement and selected balance sheet information for Direct Products Company for the year ended December 31 are presented below.

Income Statement
Sales Revenue	$	51,600
Expenses:
Cost of Goods Sold		22,500
Depreciation Expense		2,300
Salaries and Wages Expense		9,300
Rent Expense		4,800
Insurance Expense		2,050
Interest Expense		1,950
Utilities Expense		1,550
Net Income	$	7,150

Selected Balance Sheet Accounts
	Ending Balances			Beginning Balances
Accounts Receivable	$	575		$	610
Inventory		960			755
Accounts Payable		435			490
Prepaid Rent		31			23
Prepaid Insurance		28			34
Salaries and Wages Payable		94			57
Utilities Payable		26			18

Required:

Prepare the cash flows from operating activities section of the statement of cash flows using the direct method. (Amounts to be deducted should be indicated with a minus sign.)

The accounts that I have are:

Cash flows from operating activities:

Cash payments for utilities

cash payment for insurance

cash for rent

cash for salaries

cash for suppliers

cash for interest

cash for receipts from customers

net cash provided by operating activities

The accounts show correct

Answer 1

Cash for receipts from customers = Beginning accounts receivable + Sales revenue - Ending accounts receivable
Cash for receipts from customers = $610 + $51,600 - $575
Cash for receipts from customers = $51,635

Cash payments for utilities = Beginning utilities payable + Utilities expense - Ending utilities payable
Cash payments for utilities = $18 + $1,550 - $26
Cash payments for utilities = $1,542

Cash payment for insurance = Ending prepaid insurance + Insurance expense - Beginning prepaid insurance
Cash payment for insurance = $28 + $2,050 - $34
Cash payment for insurance = $2,044

Cash for rent = Ending prepaid rent + Rent expense - Beginning prepaid rent
Cash for rent = $31 + $4,800 - $23
Cash for rent = $4,808

Cash for salaries = Beginning salaries and wages payable + Salaries and wages expense - Ending salaries and wages payable
Cash for salaries = $57 + $9,300 - $94
Cash for salaries = $9,263

Purchases = Ending inventory + Cost of goods sold - Beginning inventory
Purchases = $960 + $22,500 - $755
Purchases = $22,705

Cash for suppliers = Beginning accounts payable + Purchases - Ending accounts payable
Cash for suppliers = $490 + $22,705 - $435
Cash for suppliers = $22,760

Cash for interest = Interest expense
Cash for interest = $1,950