Parmesan Company Uses the Direct Method for Its Statement of Cash

question 42

Essay

Parmesan Company uses the direct method for its statement of cash flow. It reports the following information regarding the year 2013:
From the income statement:
Assume that there were no sales of long-term assets, no interest revenue, and no expenses other than the expenses shown above. Please also assume that accounts payable are for purchases of inventory only.
Please prepare the operating activities section of the statement of cash flows using the format below:

---

Definitions:

Warranty of Title

A guarantee by a seller to a buyer that the seller has the right to transfer ownership and that no one else claims an interest in the property.

Specific Language

Language that is clearly defined and precise, used in contracts or legal documents to eliminate ambiguity.

Certain Circumstances

Specific conditions or situations that are clearly defined or understood.

CISG

The United Nations Convention on Contracts for the International Sale of Goods, a treaty that sets forth the rules governing international sales contracts.