70.2K

Verified Solution

Link Copied!

Cash flows from $($used for$)$ operating activities$$direct method

The income statement for Rhino Company for the current year ended June $30$ and balances of selected accounts at the beginning and the end of the year are as follows:

Line Item DescriptionAmountAmountSales$$$$445,500$Cost of goods sold$(154,000)$Gross profit$$$$291,500$Operating expenses:$$Depreciation expense$$38,500$Other operating expenses$115,280$Total operating expenses$(153,780)$Income before income tax$$$$137,720$Income tax expense$(39,600)$Net income$$$$98,120$

Line Item DescriptionEnd of YearBeginning of YearAccounts receivable $($net$)$$$37,100$$$31,240$Inventories$95,60080,300$Prepaid expenses$14,83015,840$Accounts payable $($merchandise creditors$)68,86062,700$Accrued expenses payable $($operating expenses$)19,69020,900$Income tax payable$4,4004,400$

Prepare the $$Cash flows from $($used for$)$ operating activities$$ section of the statement of cash flows, using the direct method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Rhino Company

Cash Flows from Operating Activities Section

For the year ended on June $30$Line Item DescriptionAmountAmountCash flows from $($used for$)$ operating activities:

Cash paid for depreciationCash received from accounts receivableCash received from customersCash received from gross profitNet incomeCash received from customers

$Cash received from customersblank

Cash paid for depreciationCash paid for merchandiseCash paid for prepaid expensesCollections of accounts receivableNet incomeCash paid for merchandise

Cash paid for merchandise

Cash paid for accounts payableCash paid for cost of merchandise soldCash paid for depreciationCash paid for operating expensesNet incomeCash paid for operating expenses

Cash paid for operating expenses

Cash paid for accounts receivableCash paid for depreciationCash paid for income taxesNet incomeNet lossCash paid for income taxes

Cash paid for income taxes

Net cash flows from operating activitiesNet cash flows used for operating activitiesNet cash flows from operating activities

$Net cash flows from operating activities

Answer & Explanation Solved by verified expert

See Answer