Duggar Company had a net income of 55,000.
Question # 00482755
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Updated on: 02/11/2017 07:13 AM Due on: 02/11/2017
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:
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:
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.
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Rating:
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Solution: Duggar Company had a net income of 55,000.