Question

Calculating Operating Cash Flows (Direct Method)

Calculate the cash flow for each of the following cases.

a. Cash paid for advertising:

Advertising expense	$62,000
Prepaid advertising, beginning of year	11,000
Prepaid advertising, end of year	15,000
Cash paid for advertising	$Answer

b. Cash paid for income taxes:

Income tax expense	$29,000
Income tax payable, beginning of year	7,100
Income tax payable, end of year	4,900
Cash paid for income taxes	$Answer

c. Cash paid for merchandise purchased:

Cost of goods sold	$180,000
Inventory, beginning of year	30,000
Inventory, end of year	25,000
Accounts payable, beginning of year	10,000
Accounts payable, end of year	12,000
Cash paid for merchandise purchased:	$Answer

Answer 1