The income statement of Gise Company is shown below: Additional information:
1. Accounts receivable increased $600,000 during the year.
2. Inventory increased $250,000 during the year.
3. Prepaid expenses increased $150,000 during the year.
4. Accounts payable to merchandise suppliers increased $125,000 during the year.
5. Accrued expenses payable increased $180,000 during the year.
Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, for Gise Company, using the direct method.

Question

The income statement of Gise Company is shown below:  Additional information:
1. Accounts receivable increased $600,000 during the year.
2. Inventory increased $250,000 during the year.
3. Prepaid expenses increased $150,000 during the year.
4. Accounts payable to merchandise suppliers increased $125,000 during the year.
5. Accrued expenses payable increased $180,000 during the year.
Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, for Gise Company, using the direct method.

Quizplus · Accepted Answer

The Answer of The income statement of Gise Company is shown below:  Additional information:
1. Accounts receivable increased $600,000 during the year.
2. Inventory increased $250,000 during the year.
3. Prepaid expenses increased $150,000 during the year.
4. Accounts payable to merchandise suppliers increased $125,000 during the year.
5. Accrued expenses payable increased $180,000 during the year.
Instructions
Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2014, for Gise Company, using the direct method.

The Income Statement of Gise Company Is Shown Below