Solution-Create the statement of cash flows using the

Create the statement of cash flows using the direct method

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Reference no: EM13513406

The income statement for Kosinski Manufacturing Company contains the following condensed information.

KOSINSKI MANUFACTURING COMPANY

Income Statement

For the Year Ended December 31, 2012

Sales revenue		$6,583,000
Operating expenses, excluding depreciation	$4,920,000
Depreciation expense	880,000	5,800,000
Income before income taxes		783,000
Income tax expense		353,000
Net income		$ 430,000

Included in operating expenses is a $24,000 loss resulting from the sale of machinery for $270,000 cash. Machinery was purchased at a cost of $750,000. The following balances are reported on Kosinski's comparative balance sheet at December 31.

KOSINSKI MANUFACTURING COMPANY

Comparative Balance Sheets (partial)

	2012	2011
Cash	$672,000	$130,000
Accounts receivable	775,000	610,000
Inventory	834,000	867,000
Accounts payable	521,000	501,000

Income tax expense of $353,000 represents the amount paid in 2012. Dividends declared and paid in 2012 totaled $200,000.

Instructions

Prepare the statement of cash flows using the direct method.

Reference no: EM13513406

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Create the statement of cash flows using the direct method

Reference no: EM13513406

Reference no: EM13513406

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