The Income Statement and a Partial Balance Sheet of Williams

question 153

Essay

The income statement and a partial balance sheet of Williams Company for the year ended December 31, 2014 is presented below. Prepare the operating activities section of the statement of cash flows using the direct method. Assume the Accrued Liabilities relate to Miscellaneous Operating Expenses.
Income Statement
$\begin{array}{llcc} \text { Sales Reverues } & \$1,500,000 \\ \text { Cost of Goods Sold } &\underline{1,170,000}\\ \text { Grong profit } &\$330,000\\\end{array}$
Operating expenses:
$\begin{array}{llcc} \text { Salaries Expense } & \$210,000 \\ \text { Depreciation Expense } &60,000\\ \text { Miscellaneous Expenses } &\underline{30,000}&\underline{300,000}\\ \text { Net Income } &&\underline{\$30,000}\\\end{array}$
Partial Balance Sheet
$$\begin{array} { l l l } & 2014 & 2013 \\\text { Cash } & \$ 240,000 & \$ 195,000 \\ \text { Accounts Receivable (net) } & 150,000 & 150,000 \\\text { Inventories } & 306,000 & 258,000 \\\text { Accrued Liabilities } & 13,500 & 15,000 \\\text { Accounts Payable (inventory) } & 174,000 & 153,000 \\\text { Salaries Payable }& 22,500 & 18,000\end{array}$$

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Definitions:

Corporation

A legal entity that is separate from its owners, providing them limited liability, and has the ability to raise capital through the sale of shares.

Service Business

A type of business that provides intangible products, such as time, expertise, or activities, where physical goods are not transferred to the customer.

Pet Groomer

A professional who cleans, trims, and styles pets' coats, nails, and fur to maintain their appearance and hygiene.

Lawn Care

The maintenance and management of gardens, yards, or other grassy areas to ensure healthy growth and aesthetic appeal.