Net Income for the Hot Springs Company for the Most

question 26

Essay

Net income for the Hot Springs Company for the most recent year was $150,000,consisting of $865,000 of revenues,$360,000 of cost of goods sold,and $365,000 of operating expenses.The following changes in current assets and current liabilities have been identified:
1.Accounts receivable increased by $85,000.
2.Inventory decreased by $37,500.
3.Accounts payable increased by $82,500.
4.Accrued operating expenses payable decreased by $45,000.
Required:
Calculate the cash flows from operating activities for the year,applying the direct method.Identify the individual amounts that would be disclosed in the statement of cash flows where possible.

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Definitions:

Ego Identity

A sense of one's identity and personal worth developed during adolescence, as conceptualized by Erik Erikson.

Ego

The part of the psyche that mediates between the desires of the id, demands of the reality, and the moral standards of the superego in psychoanalytic theory.

Id

In Freudian psychoanalysis, the part of the mind that contains innate biological drives and instincts; operates based on the pleasure principle.

Freud

Sigmund Freud, an Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue.