Calculate cash generated from operations using direct method

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Reference no: EM133340980

Question: The following information was extracted from the books ofUrban Manufacturing Company:

Statement of profit or loss for year ended December 31, 2018

Details	$	$
Cash sales		60,000
Credit sales		480,000
		540,000
Cost of sales:
Opening inventory	20,000
Cash purchases	12,000
Credit purchases	288,000
Closing inventory	(68,000)	(252,000
Gross profit		288,000
Less: Expenses
Depreciation	35,600
Wages	92,000
Overheads	60,000
Finance costs	12,800	(200,400)
Profit before tax		87,600

Statement of Financial Position (extract) at December 31, 2018

Details	2007 $	2008 $
Inventory	20,000	68,000
Receivables	12,000	38,000
Payables	10,000	31,600
Overhead accruals	4,000	3,600

All wages are paid in cash.

Required:

Use the above information to calculate cash generated from operations using the "direct method" of cash flow. (Show all workings)

Reference no: EM133340980

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