Crane Company’s income statement for the year ended December 31, 2017, contained
ID: 2577183 • Letter: C
Question
Crane Company’s income statement for the year ended December 31, 2017, contained the following condensed information.
$839,000
$624,000
60,000
26,000
710,000
129,000
39,000
$90,000
Crane’s balance sheet contained the following comparative data at December 31.
2017
2016
(Accounts payable pertains to operating expenses.)
Prepare the operating activities section of the statement of cash flows using the direct method.
$839,000
Operating expenses (excluding depreciation)$624,000
Depreciation expense60,000
Loss on sale of equipment26,000
710,000
Income before income taxes129,000
Income tax expense39,000
Net income$90,000
Explanation / Answer
Cash flows from operating activities cash received from customers (839,000+14000 decrease in A/R) 853000 cash paid for operating expense(624,000-8,000) 616000 Cash paid for income tax expense (39000-4,100) 34900 650900 Cash from operating activities 202100