The income statement of Rodriquez Company
Problem 1
The income statement of Rodriquez Company is shown below.
| RODRIQUEZ COMPANY
| ||||
| Sales
| $6,894,600
| |||
| Cost of goods sold
| ||||
| Beginning inventory
| $1,893,870
| |||
| Purchases
| 4,375,530
| |||
| Goods available for sale
| 6,269,400
| |||
| Ending inventory
| 1,608,650
| |||
| Cost of goods sold
| 4,660,750
| |||
| Gross profit
| 2,233,850
| |||
| Operating expenses
| ||||
| Selling expenses
| 440,640
| |||
| Administrative expenses
| 703,840
| 1,144,480
| ||
| Net income
| $1,089,370
|
Additional information:
| 1.
| Accounts receivable decreased $312,690 during the year.
| |
| 2.
| Prepaid expenses increased $178,550 during the year.
| |
| 3.
| Accounts payable to suppliers of merchandise decreased $281,970 during the year.
| |
| 4.
| Accrued expenses payable decreased $124,510 during the year.
| |
| 5.
| Administrative expenses include depreciation expense of $55,760.
|
Prepare the operating activities section of the statement of cash flows using the direct method.
