Line Item Description 20X1 20X2 Current assets: Accounts receivable $750,000 $582,500 Inventories 300,000 320,000 Current liabilities: Wages payable 700,000 515,000 Davis CompanyIncome StatementFor the Year Ended December 31, 20X2 Line Item Description Amount Amount Revenues $3,000,000 Cost of goods sold 1,920,000 Gross margin $1,080,000 Operating expenses Depreciation 270,000 Operating income $ 810,000 Other revenues and expenses Gain on sale of equipment 100,000 Interest expense 10,000 90,000 Net income $ 900,000 Required: Compute operating cash flows using the indirect method.
Line Item Description 20X1 20X2 Current assets: Accounts receivable $750,000 $582,500 Inventories 300,000 320,000 Current liabilities: Wages payable 700,000 515,000 Davis CompanyIncome StatementFor the Year Ended December 31, 20X2 Line Item Description Amount Amount Revenues $3,000,000 Cost of goods sold 1,920,000 Gross margin $1,080,000 Operating expenses Depreciation 270,000 Operating income $ 810,000 Other revenues and expenses Gain on sale of equipment 100,000 Interest expense 10,000 90,000 Net income $ 900,000 Required: Compute operating cash flows using the indirect method.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
| Line Item Description | 20X1 | 20X2 |
|---|---|---|
| Current assets: | ||
| Accounts receivable | $750,000 | $582,500 |
| Inventories | 300,000 | 320,000 |
| Current liabilities: | ||
| Wages payable | 700,000 | 515,000 |
Davis CompanyIncome StatementFor the Year Ended December 31, 20X2
| Line Item Description | Amount | Amount |
|---|---|---|
| Revenues | $3,000,000 | |
| Cost of goods sold | 1,920,000 | |
| Gross margin | $1,080,000 | |
| Operating expenses | ||
| |
270,000 | |
| Operating income | $ 810,000 | |
| Other revenues and expenses | ||
| Gain on sale of equipment | 100,000 | |
| Interest expense | 10,000 | 90,000 |
| Net income | $ 900,000 |
Required:
Compute operating
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