Cash Flows from operating Activities: Indirect Method e2A. The condensed single-step income… 1 answer below »

  Cash Flows from operating Activities: Indirect Method

e2A. The condensed single-step income statement for the year ended December 31, 2014, of Conti Chemical Company, a distributor of farm fertilizers and herbicides, follows.

 

Sales

 

 

$26,000,000

Less: Cost of goods sold

$15,200,000

 

 

Operating expenses (including depreciation of $1,640,000)

7,600,000

 

 

Income taxes expense

800,000

 

23,600,000

Net income

 

 

$  2,400,000

Selected accounts from Conti Chemical’s balance sheets for 2014 and 2013 follow.

 

 

2014

2013

Accounts receivable

$4,800,000

$3,400,000

Inventory

1,680,000

2,040,000

Prepaid expenses

520,000

360,000

Accounts payable

1,920,000

1,440,000

Accrued liabilities

120,000

200,000

Income taxes payable

280,000

240,000

 

Prepare a schedule of cash flows from operating activities using the indirect method.