Balances in the company’s current assets and current liability
Subject: Business   / Accounting
Question
Duggar Company had a net income of 55,000.
A) Balances in the company’s current assets and current liability accounts at the beginning and end of the years were:
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End
of the Year
Beginning
of the Year
Current Assets
Cash
$44,560
$66,324
Accounts Receivable
135,342
101,222
Inventory
243,321
162,435
Prepaid Expenses
9,381
10,435
Current Liabilities
Accounts Payable
201,456
173,243
Accrued Liabilities
3,202
5,893
B) Balances in the company’s income statement were:
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Sales
$ 370,000
Less Cost of Goods Sold
140,000
Gross Margin
230,000
Less Operating Expenses
160,000
Income Before Taxes
70,000
Less Income Taxes
15,000
Net Income
$55,000
The deferred taxes liability account on the balance sheet increase by 5,000 during the year and depreciation charges were $40,000.
Required:
A. the indirect method, determine the net cash provided by operating activities for the year.
B. Using the direct method, convert the company’s income statement to a cash basis.
