Prepare the cash flows for country kitchen bakeries

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Reference no: EM13516712

The income statement of Country Kitchen Bakeries Inc. for the current year ended June 30 is as follows:

Sales

 

$456,000

Cost of merchandise sold

 

259,000

Gross profit

 

$197,000

Operating expenses:

 

 

Depreciation expense

$35,000

 

Other operating expenses

92,400

 

Total operating expenses

 

127,400

Income before income tax

 

$ 69,600

Income tax expense

 

19,300

Net income

 

$ 50,300

Changes in the balances of selected accounts from the beginning to the end of the current year are as follows:

 

Increase

 

Decrease*

Accounts receivable (net)

$10,500*

Inventories

3,500

Prepaid expenses

3,400*

Accounts payable (merchandise creditors)

7,200*

Accrued expenses (operating expenses)

1,100

Income tax payable

2,400*

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

Reference no: EM13516712

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