Reference no: EM131763683

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.