Sentrino Company Uses the Direct Method for Its Statement of Cash

question 46

Essay

Sentrino Company uses the direct method for its statement of cash flow. Assume Accrued Liabilities relate to Operating Expenses. It reports the following information regarding the year ending December 31, 2014:
$\begin{array}{c}\text { Incone Statement}\\\begin{array}{lll}\text { Sales Revenue}\\\text { Cost of Goods Sold}\\\text { Operating expenses:}\\\text { Net Income}\end{array}\begin{array}{l}\$ 312,000 \\247,000 \\\underline{2,500}\\\underline{\underline{{\$ 32,500}}} \end{array}\end{array}$

$\begin{array}{c}\text { Partial Balance Sheet }\\\begin{array}{lll}\\\text {Accounts Receivable (net)}\\\text {Inventories}\\\text {Accrued Liabilities}\\\text {Accounts Payable (inventory)} \end{array}\begin{array}{l}2013 \\\$ 15,600 \\28,600 \\3,900 \\9,100 \end{array}\begin{array}{l}2014 \\\$ 19,500 \\23,400 \\1,560 \\15,600 \end{array}\end{array}$
Assume that there were no sales of long-term assets, no Interest Revenue, and no expenses other than the expenses shown above. Also, assume that Accounts Payable is for purchases of inventory only. Prepare the operating activities section of the statement of cash flows.

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Definitions:

Experimental Realism

Relates to the extent to which the scenarios and conditions of an experiment are engaging and immersive enough for participants to behave naturally and authentically.

Mundane Realism

The degree to which the conditions of an experiment mimic the real-world settings to which its results can be applied.

Experimental Realism

The extent to which experiment conditions mimic real-life situations, enhancing the validity of the findings.

Mundane Realism

The degree to which an experiment is superficially similar to everyday situations, enhancing its external validity.