Problem 12-4A The income statement of Paxson Company is presented here PAXSON CO

Question

Problem 12-4A The income statement of Paxson Company is presented here PAXSON COMPANY Income Statement For the Year Ended November 30. 2014 Sales revenue $7,678,900 Cost of goods sold $2,086,100 4,499,900 6,586,000 1,670,500 Beginning inventory Purchases Goods available for sale Ending inventory Total cost of goods sold Gross profit Operating expenses 4,915,500 2,763,400 Selling expenses 465,300 702,800 11o8 100 Administrative expenses Net income 1,595,300 Additional information: 1. Accounts receivable decreased $411,500 during the year, and inventory decreased $415,600 2. Prepaid expenses increased $146,700 during the year 3. Accounts payable to suppliers of merchandise decreased $352,500 during the year. 4. Accrued expenses payable decreased $113,500 during the year 5. Administrative expenses include depreciation expense of $155,300

Explanation / Answer

PAXSON COMPANY Cash Flow Statement For year ended 31 December 2014 Cash flows from operating activities Net Income $ 1,595,300 Adjustment to reconcile net income to: Depreciation expense $   155,300 Decrease in accounts receivable $   411,500 Decrease in inventory $   415,600 Increase in prepaid expenses $ (146,700) Decrease in accounts payable $ (352,500) Decrease in accrued expenses $ (113,500) $     369,700 Net cash provided by operating activities $ 1,965,000

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