Prepare the operating activities section of statement

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Reference no: EM13151780

The income statement of Guesser Company is shown below.

GUESSER COMPANY

INCOME STATEMENT

FOR THE YEAR ENDED DECEMBER 31, 2007

Sales $755,000

Cost of goods sold 543,000

Gross profit 212,000

Operating expenses

Selling expenses $52,000

Administrative expenses 89,000 141,000

Net income $71,000

Additional information:

1. Accounts receivable decreased $63,000 during the year.

2. Inventory increased $38,000 during the year.

3. Prepaid expenses increased $12,000 during the year.

4. Accounts payable to increased $25,000 during the year.

5. Accrued expenses payable increased $6,000 during the year.

6. Administrative expenses include depreciation expense of $20,000.

Instructions

Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2007, for Guesser Company, using the indirect method.

Reference no: EM13151780

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