Use the Following Income Statement and Information About Selected Current

question 116

Essay

Use the following income statement and information about selected current assets and current liabilities to calculate the net cash provided or used by operating activities using the indirect method.
PULLMAN COMPANY
Income Statement
For Year Ended December 31, 20X2
$$\begin{array} { l | r | r } \hline \text { Sales } & & \$ 180,000 \\\hline \text { Cost of goods sold } & & 104,000 \\\hline \text { Gross profit from sales } & & \$ 76,000 \\\hline \text { Operating expenses: } & & \\ \hline \text { Salaries and wages expense } & \$ 25,000& \\\hline \text { Depreciation expense } & 7,000 & \\\hline \text { Rent expense } & 7,200 \\\hline \text { Interest expense } &1,900 & \underline { 41,100 } \\\hline \text { Income from operations } & & \$ 34,900 \\\hline \text { Loss on sale of land } & & 3 , 5 0 0 \\\hline \text { Net income } & & \$ 31,400 \\\hline\end{array}$$ Selected beginning and ending balances of current asset and current liability accounts, all of which relate to operating activities, are as follows:
$$\begin{array} { l | r | r } &{ \text { Balance } } \\\hline & \text { Dec. 31, 20X2 } & \text { Dec. 31, 20X1 } \\\hline \text { Accounts receivable } & \$ 27,600 & \$ 24,000 \\\hline \text { Merchandise inventory } & 22,300 & 20,000 \\\hline \text { Prepaid rent } & 550 & 400 \\\hline \text { Accounts payable } & 27,100 & 26,000 \\\hline \text { Salaries and wages payable } & 10,400 & 9,000 \\\hline \text { Interest payable } & 300 & 250\end{array}$$

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Definitions:

Electrocardiogram

A medical test that measures the electrical activity of the heart to identify different heart conditions.

Caffeine

A stimulant found in coffee, tea, and various other plants, known for its ability to temporarily ward off drowsiness and restore alertness.

Hemodynamic Changes

Alterations in the blood flow or blood pressure within the circulatory system.

Systolic Blood Pressure

The top number in a blood pressure reading, representing the pressure in the arteries when the heart beats.