Reference no: EM133077510
Question - Use the following information and prepare an Income Statement (to calculate the net profit) and a Statement of Cash Flows for the month.
Identify 2 causes for the difference between net profit and cash flow from operating activities. Describe what the Cash Flow Statement reveals.
Cash balance, start of month 25,600 Insurance expense 4,800
Cash balance, end of month 29,800 Insurance paid in advance for the next 6 months 2,800
Cash sales 82,000 Inventory purchased for cash 38,000
Collections from accounts receivable 45,000 Office expenses paid 8,000
Cost of sales 79,000 Payment on accounts payable 44,000
Credit sales 58,000 Proceeds from borrowings 53,000
Depreciation expense 2,700 Proceeds from sale of office furniture 7,000
Drawings (cash) 20,000 Purchase of office furniture and computer for cash 48,000
Wages paid 22,000
Required - Prepare an Income Statement to calculate the net profit.